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NBER Working Papers and Publications

May 2020Do Conservation Policies Work? Evidence from Residential Water Use
with Oliver R. Browne, Michael Greenstone
in Environmental and Energy Policy and the Economy, volume 2, Matthew Kotchen, James H. Stock, and Catherine Wolfram, editors
In response to the historic 2011–2017 California drought, local governments enacted a raft of conservation policies and little is known about which ones explain the sharp decline in residential water consumption. To answer this question, we use a novel data set of hourly water consumption data for over 82,300 households in Fresno, California where water consumption declined by nearly a third and have three main findings. First, we estimate the price elasticity of demand for water to be 0.16 for marginal rates and 0.39 for average rates. Second, reducing the number of days where outdoor watering is allowable from 3 to 2 substantially decreases water use, despite the availability of opportunities to substitute between permitted and non-permitted hours, days, and seasons. Third, "bully pulpit...
September 2019Collective Reputation in Trade: Evidence from the Chinese Dairy Industry
with Jie Bai, Yukun Wang: w26283
Collective reputation implies an important externality. Among firms trading internationally, quality shocks about one firm’s products could affect the demand of other firms from the same origin country. We study this issue in the context of a large-scale scandal that affected the Chinese dairy industry in 2008. Leveraging rich firm-product level administrative data and official quality inspection reports, we find that the export revenue of contaminated firms dropped by 84% after the scandal, relative to the national industrial trend, and the spillover effect on non-contaminated firms is measured at 64% of the direct effect. Notably, firms deemed innocent by government inspections did not fare any better than noninspected firms. These findings highlight the importance of collective reputati...
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