I investigate high school tracking policies using a dynamic discrete choice model of study programs and unobserved effort. I estimate the model using data from Flanders (Belgium) and perform an ex-ante evaluation of a policy that encourages underperforming students to switch to less academically ori-ented programs. This reduces grade retention by a third and dropout by 11%. Although it decreases college enrollment, the decrease in college graduation is small and insignificant. I also show that modeling effort is important, otherwise we would predict smaller decreases in grade retention and dropout and larger decreases in college enrollment and graduation.

We study a generous program to promote the adoption of solar photovoltaic (PV) systems through subsidies on future electricity production, rather than through upfront investment subsidies. We develop a tractable dynamic model of new technology adoption, also accounting for local market heterogeneity. We identify the discount factor from demand responses to variation that shifts expected future but not current utilities. Despite the massive adoption, we find that households significantly discounted the future benefits from the new technology. This implies that an upfront investment subsidy program would have promoted the technology at a much lower budgetary cost.