Department of Economics
64 Waterman Street
Providence, RI 02912
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: Brown University
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 and Environmental Stewardship: Evidence from the BP Oil Spill|
with Eric Chyn, Justine Hastings: w19838
This paper explores whether private markets can incentivize environmental stewardship. We examine the consumer response to the 2010 BP oil spill and test how BP's investment in the 2000-2008 “Beyond Petroleum” green advertising campaign affected this response. We find evidence consistent with consumer punishment: BP station margins and volumes declined by 2.9 cents per gallon and 4.2 percent, respectively, in the month after the spill. However, pre-spill advertising significantly dampened the price response, and may have reduced brand switching by BP stations. These results indicate that firms may have incentives to engage in green advertising without investments in environmental stewardship.