Date(s): January 22, 2015, 2:00-3:30 pm

Location: Room 4128, William Jefferson Clinton West Building, 1301 Constitution Ave., NW, Washington, DC

Contact: Carl Pasurka, 202-566-2275

Presenter(s): Hunt Allcott (Department of Economics, New York University) and Dmitry Taubinsky (Department of Economics, Harvard University)

Description: 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.

Seminar Category: Climate Economics