The Allocative Cost of Price Ceilings in the U.S. Residential Market for Natural Gas

Davis, Lucas W.; Kilian, Lutz

doi:10.1086/660124

Cited by 86 publications

(32 citation statements)

References 34 publications

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“…Energy asset acquisition is also studied in the context of energy consumption with Dubin and McFadden (1984) among the first to highlight that asset ownership is endogenous in an energy demand model. Recent applications include Davis and Kilian (2011) who model natural gas demand in the US and also Mansur et al (2008), which models fuel choice rather than heating system choice in the context of modelling household fuel consumption. Gertler et al (2016) have modelled the effect of households' income growth on asset acquisition in the face of credit constraints.…”

Section: Related Literaturementioning

confidence: 99%

Exploring the spatial and temporal determinants of gas central heating adoption

McCoy

Curtis

2018

Resource and Energy Economics

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a b s t r a c tIn order to better understand the potential for both policy and technological improvements to aid carbon abatement, long-term historical information on the time-path of transition from more traditional to cleaner fuels is useful. This is a relatively understudied element of the fuel switching literature in both developed and emerging economies. This research adds to this literature by examining the adoption time-path of network gas as a heating fuel. We merge a unique dataset on gas network roll-out over time, with other geo-coded data and employ an instrumental variables technique in order to simultaneously model supply and demand. Results indicate a non-linear relationship between the proportion of households using gas as their primary means of central heating and the length of time the network has been in place in each area. Proximity to the gas network, peat bogs, and areas which have banned the consumption of bituminous coal also affect gas connections. Variations in socioeconomic and dwelling characteristics at area level can also help explain connections to the gas network. A better understanding of this variation is crucial in designing targeted policies and can aid network expansion decisions.

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Section: Related Literaturementioning

confidence: 99%

Exploring the spatial and temporal determinants of gas central heating adoption

McCoy

Curtis

2018

Resource and Energy Economics

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“…6 Price controls are not unique to housing markets. A large literature examines the effects of price controls in labor markets (Holzer, Katz and Krueger, 1991;Card and Krueger, 1995) and energy markets (Frech and Lee, 1987;Davis and Killian, 2011). Relative to this literature, our main interest is on a relatively under-explored consequence of price controls: the external effects on the non-controlled sector, which seem likely to play an especially important role in the housing market.…”

Section: Introductionmentioning

confidence: 99%

Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge Massachusetts

Autor¹,

Palmer²,

Pathak³

2012

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Understanding potential spillovers from the attributes and actions of neighborhood residents onto the value of surrounding properties and neighborhoods is central to both the theory of urban economics and the development of efficient housing policy. This paper measures the capitalization of housing market spillovers by studying the sudden and largely unanticipated 1995 elimination of stringent rent controls in Cambridge, Massachusetts that had previously muted landlords' investment incentives and altered the assignment of residents to locations. Pooling administrative data on the assessed values of each residential property and the prices and characteristics of all residential transactions between 1988 and 2005, we find that rent control's removal produced large, positive, and robust spillovers onto the price of never-controlled housing from nearby decontrolled units. Elimination of rent control added about $1.8 billion to the value of Cambridge's housing stock between 1994 and 2004, equal to nearly a quarter of total Cambridge residential price appreciation in this period. Positive spillovers to never-controlled properties account for more half of the induced price appreciation. Residential investments can explain only a small fraction of the total.

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“…2 See, for example, recent contributions on heating systems byDavis and Kilian (2011) and automobiles byBusse, Knittel, and Zettelmeyer (2013).3 In some countries, there are large upfront prices for an electricity connection. In Kenya, for example, the cost of connecting to the electricity grid is around $400, about one-third of the average annual income in the country.…”

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confidence: 99%

The Demand for Energy-Using Assets among the World's Rising Middle Classes

Gertler¹,

Shelef

Wolfram³

et al. 2016

American Economic Review

110

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We study household decisions to acquire energy-using assets in the presence of rising incomes. We develop a theoretical framework to characterize the effect of income growth on asset purchases when consumers face credit constraints. We use large and plausibly exogenous shocks to household income generated by the conditionalcash-transfer program in Mexico, Oportunidades, to show that asset acquisition is nonlinear, depends, as predicted in the presence of credit constraints, on the pace of income growth, and both effects are economically large among beneficiaries. Our results may help explain important worldwide trends in the relationship between energy use and income growth. (JEL D12, I32, I38, O12, O13, Q47)Energy is a fundamental input to modern life. Without access to commercial energy sources, such as gasoline, natural gas, and electricity, people could not drive vehicles, refrigerate food and medicine, air condition buildings, watch television, easily operate farming equipment, or participate in many other aspects of modern life. Despite this, an estimated 1.3 billion people live without electricity in their homes, and even among those who have access, many do not own basic assets such as refrigerators, motorized transport, or washing machines. In fact, Table 1 demonstrates the low penetration of several key energy-using assets for over 4 billion people living in the developing world, especially when compared to high-income countries such as the United States. However, this situation is rapidly changing as incomes rise from economic growth and as massive poverty alleviation programs continue to expand.

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The Allocative Cost of Price Ceilings in the U.S. Residential Market for Natural Gas

Cited by 86 publications

References 34 publications

Exploring the spatial and temporal determinants of gas central heating adoption

Exploring the spatial and temporal determinants of gas central heating adoption

Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge Massachusetts

The Demand for Energy-Using Assets among the World's Rising Middle Classes

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