Essays on Environmental and Energy Economics

Abstract

This dissertation applies techniques from the expanding field of econometrics to the study of contemporary issues in environmental and resource economics. Three essays are offered that aim to generate meaningful policy implications through econometric analyses of the voluminous data recently becoming available to researchers. The first essay examines how overall price, quality and welfare changed as energy effi- ciency standards in the US became progressively more stringent between 2001-2011. A novel index-the Constant Quality Price Index (CQPI)-is developed to delineate changes in overall price and quality. Results obtained using point-of-sale data from individual clothes washers sold in the US during the period suggest that standards on washing machines have had at worst a negligible effect on consumer welfare, or at best lowered prices and improved quality for washers. The second essay analyzes the relationship between foreign acquisition and aspects of plant-level environmental performance using micro data from the Indonesian Census of Manufacturing. To establish a causal effect of ownership change, a difference-in-differences approach is combined with coarsened exact matching. A total of 264 acquisition cases between 1983-2001 are considered, where an acquired plant is observed at least a year before and three years after undergoing a change in ownership, and for which a carefully selected control plant exists. Results suggest that FDIs can have positive scale and technique effects on the environmental performance of acquired plants. These effects are especially pronounced for small firms and firms that were relatively inefficient prior to acquisition. The third essay analyzes the impact of oil price shocks on the US economy at the individual state level. The study accounts for the endogeneity of changes in crude oil price, differences among states, and spillover effects with neighboring states. Results suggest that the implications of higher oil prices for a state’s economic growth depend on the underlying cause of the oil price change and a state’s average production of oil relative to its average consumption. The direct effect of oil price shocks can be either magnified or tempered by spillover effects, which may also explain why regional recessions may occur with certain oil price shocks.