Abstract “Site selection bias” can occur when the probability that a program is adopted or evaluated is correlated with its impacts. I test for site selection bias in the context of the Opower energy conservation programs, using 111 randomized control trials involving 8.6 million households across the United States. Predictions based on rich microdata from the first 10 replications substantially overstate efficacy in the next 101 sites. Several mechanisms caused this positive selection. For example, utilities in more environmentalist areas are more likely to adopt the program, and their customers are more responsive to the treatment. Also, because utilities initially target treatment at higher-usage consumer subpopulations, efficacy drops as the program is later expanded. The results illustrate how program evaluations can still give systematically biased out-of-sample predictions, even after many replications.

This paper presents three initial stylized facts from the Vehicle Ownership and Alternatives Survey (VOAS), a nationally representative survey that elicits consumers' beliefs about gasoline prices and the relative energy costs of autos with different fuel economy ratings. First, American consumers devote little attention to fuel costs when purchasing autos. Second, consistent with a cognitive bias called “MPG Illusion,” consumers underestimate the fuel cost differences between low-MPG vehicles and overestimate the differences between high-MPG vehicles. Third, Americans' mean and median expected future gas prices were above current prices and predictions of the futures market at the time of the survey. Although it is often argued that misperceived energy costs justify policies to encourage the sale of energy efficient durable goods, these results show that misperceptions and expectations that differ from market information could either increase or decrease energy efficiency.

Do natural resources benefit producer economies, or is there a “Natural Resource Curse”, perhaps as the crowd-out of manufacturing productivity spillovers reduces long-term growth? We combine new data on oil and gas endowments with Census of Manufactures microdata to estimate how oil and gas booms affect local economies in the U.S. Local wages rise during oil and gas booms, but manufacturing is not crowded out—in fact, the sector grows overall, driven by upstream and locally-traded subsectors. Tradable manufacturing subsectors do contract during resource booms, but their productivity is unaffected, so there is no evidence of foregone local learning-by-doing effects. Over the full 1969–2014 sample, a county with one standard deviation additional oil and gas endowment averaged about 1% higher real wages. Overall, the results provide evidence against a Natural Resource Curse within the U.S.

Policymakers often assert that consumers undervalue future gasoline costs when they buy automobiles. We test this by measuring whether relative prices of vehicles with different fuel economy ratings fully adjust to variation in gasoline prices. Vehicle prices move as if consumers are indifferent between $1.00 in discounted future gas cost and $0.76 in vehicle purchase price. We show how corrections for endogenous market shares and utilization, measurement error, and different gasoline price forecasts affect the results. We also provide unique evidence of sticky information: vehicle markets respond to changes in gasoline prices with up to a six-month delay.

Imperfect information and inattention to energy costs are important potential motivations for energy efficiency standards and subsidies. We evaluate these motivations in the lightbulb market using a theoretical model and two randomized experiments. We derive welfare effects as functions of reduced-form sufficient statistics capturing economic and psychological parameters, which we estimate using a novel within-subject information disclosure experiment. The main results suggest that moderate subsidies for energy-efficient lightbulbs may increase welfare, but informational and attentional biases alone do not justify a ban on incandescent lightbulbs. Our results and techniques generate broader methodological insights into welfare analysis with misoptimizing consumers. (JEL D12, D83, H21, H31, L67, Q41, Q48)

We document three remarkable features of the Opower program, in which social comparison-based home energy reports are repeatedly mailed to more than six million households nationwide. First, initial reports cause high-frequency “action and backsliding,” but these cycles attenuate over time. Second, if reports are discontinued after two years, effects are relatively persistent, decaying at 10–20 percent per year. Third, consumers are slow to habituate: they continue to respond to repeated treatment even after two years. We show that the previous conservative assumptions about post-intervention persistence had dramatically understated cost effectiveness and illustrate how empirical estimates can optimize program design.(JEL D12, D83, L94, Q41)

We estimate the effects of electricity shortages on Indian manufacturers, instrumenting with supply shifts from hydroelectric power availability. We estimate that India's average reported level of shortages reduces the average plant's revenues and producer surplus by 5 to 10 percent, but average productivity losses are significantly smaller because most inputs can be stored during outages. Shortages distort the plant size distribution, as there are significant economies of scale in generator costs and shortages more severely affect plants without generators. Simulations show that offering interruptible retail electricity contracts could substantially reduce the impacts of shortages. (JEL D24, L60, L94, O13, O14, Q41)

Many have argued that digital technologies such as smartphones and social media are addictive. We develop an economic model of digital addiction and estimate it using a randomized experiment. Temporary incentives to reduce social media use have persistent effects, suggesting social media are habit forming. Allowing people to set limits on their future screen time substantially reduces use, suggesting self-control problems. Additional evidence suggests people are inattentive to habit formation and partially unaware of self-control problems. Looking at these facts through the lens of our model suggests that self-control problems cause 31 percent of social media use. (JEL D12, D61, D90, D91, I31, L86, O33)

It is often argued that people might take on too much high-cost debt because they are present focused and/or over-optimistic about how soon they will repay. We measure borrowers’ present focus and over-optimism using an experiment with a large payday lender. Although the most inexperienced quartile of borrowers under-estimate their likelihood of future borrowing, the more experienced three quartiles predict correctly on average. This finding contrasts sharply with priors we elicited from 103 payday lending and behavioural economics experts, who believed that the average borrower would be highly overoptimistic about getting out of debt. Borrowers are willing to pay a significant premium for an experimental incentive to avoid future borrowing, which we show implies that they perceive themselves to be time inconsistent. We use borrowers’ predicted behaviour and valuation of the experimental incentive to estimate a model of present focus and naivete. We then use the model to study common payday lending regulations. In our model, banning payday loans reduces welfare relative to existing regulation, while limits on repeat borrowing might increase welfare by inducing faster repayment that is more consistent with long-run preferences.

ABSTRACT Growing discussions of impact investing and stakeholder capitalism have increased interest in measuring companies' social impact. We conceptualize corporate social impact as the welfare loss that would be caused by a firm's exit. To illustrate, we quantify the social impacts of 74 firms in 12 industries using a new survey measuring consumer and worker substitution patterns combined with models of product and labor markets. We find that consumer surplus is the primary component of social impact, suggesting that consumer impacts deserve more attention from impact investors. Existing environmental, social, and governance (ESG) and social impact ratings are essentially unrelated to our economically grounded measures.