Department of Economics
64 Waterman Street
Providence, RI 02912
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Information about this author at RePEc
NBER Working Papers and Publications
|August 2018||Climate Shocks, Cyclones, and Economic Growth: Bridging the Micro-Macro Gap|
with Laura Bakkensen: w24893
Empirical analyses of the impacts of climatic shocks on growth, while critical for policy, have found seemingly disparate results and are seldom incorporated into macroeconomic climate-economy models. This paper seeks to bridge this micro-macro gap through the case of tropical cyclones. We first present a stochastic endogenous growth model that can reconcile previous empirical findings. We then empirically estimate the impacts of cyclones on the structural determinants of growth (total factor productivity, depreciation, fatalities), instead of growth itself, facilitating direct inclusion into the seminal DICE climate-economy model. Cyclone damages are estimated to increase the social cost of carbon by 10-15%.
|September 2017||Flood Risk Belief Heterogeneity and Coastal Home Price Dynamics: Going Under Water?|
with Laura A. Bakkensen: w23854
How do climate risk beliefs affect coastal housing markets? This paper provides theoretical and empirical evidence. First, we build a dynamic housing market model and show that belief heterogeneity can reconcile the mixed empirical evidence on flood risk capitalization into housing prices. Second, we implement a field survey in Rhode Island. We find significant heterogeneity and sorting based on flood risk perceptions and amenity values. Third, we calibrate the model and estimate that coastal prices currently exceed fundamentals by 10%. Ignoring heterogeneity leads to a four-fold underestimate of future coastal home price declines due to sea level rise.
|January 2014||Advertising as Insurance or Commitment? Evidence from the BP Oil Spill|
with Eric Chyn, Justine Hastings: w19838
This paper explores how advertising impacts the consumer response to news about unobserved product quality. Specifically, we estimate how British Petroleum’s (BP) 2000-2008 “Beyond Petroleum” advertising campaign affected the impact of the 2010 BP oil spill. We find that BP station margins declined by 4.2 cents per gallon, and volumes declined by 3.6 percent after the spill. However, pre-spill advertising significantly dampened the price response in the short-run, and reduced the fraction of BP stations switching brand affiliation in the long-run. Our results suggest that advertising provides insurance against adverse events. We discuss implications for private provision of environmental stewardship.