Two of this week's NBER working papers might be of particular interest to anyone who reads this blog. First, Chie Hanaoka, Hitoshi Shigeoka, and Yosutora Watanabe have a new paper looking at the effect of the 2011 Japanese earthquake on risk preferences, using a really cool panel dataset. They write:
“We investigate whether individuals’ risk preferences change after experiencing a natural disaster— specifically, the Great East Japan Earthquake in 2011. The novelty of our study is that we use panels of nationally representative surveys, and thus, we can track the changes in risk preferences of the same individuals. We find that people who experienced greater intensity of the Earthquake become more risk tolerant. Interestingly, all the results are driven by men. Furthermore, these men gamble and drink more. Finally, we compare the estimates from cross-sectional and panel specifications, demonstrating that the cross-sectional estimate may be biased due to unobserved heterogeneity.”
Next, in light of all of the brouhaha about energy efficiency that was generated after Meredith Fowlie, Michael Greenstone, and Catherine Wolfram released their working paper showing that the Weatherization Assistance Program results in much lower energy savings than projected, Matt Kotchen's new NBER paper finding that home energy building codes do actually reduce natural gas usage is a welcome addition to the world of energy efficiency economics. As much as it's important to get the science right and make it known when savings measures (especially those subsidized by the government) don't deliver, I'm always happy to see results showing that policy actually has the desired effect. Kotchen's abstract states:
“This paper provides an ex post evaluation of how changes to a building energy code affect energy consumption. Using residential billing data for electricity and natural gas over 11 years, the analysis is based on comparisons between residences constructed just before and just after a building code change in Florida. While an earlier study using 3 years of data for the same residences showed savings for both electricity an natural gas, new results show an enduring savings for natural gas only. These findings underscore the importance of accounting for age versus vintage effects and all sources of energy consumption when conducting evaluations of building codes. More broadly, the results provide a counterpoint to the growing literature casting doubt on whether ex ante forecasts of energy efficiency policies and investments can provide useful information about actual energy savings. Indeed, more than a decade after Florida’s energy code change, the measured energy savings still meets or exceeds the forecasted amount.”
Cool!