Research
Publications
Working Papers
Heutel, Garth, and Xin Zhang. “Efficiency wages, unemployment, and environmental policy.” Energy Economics (2021): 105639.
Abstract: We study the incidence of pollution taxes and their impact on unemployment in an analytical general equilibrium efficiency wage model. We find closed-form solutions for the effect of a pollution tax on unemployment, factor prices, and output prices, and we identify and isolate different channels through which these general equilibrium effects arise. An effect arising from the efficiency wage specification depends on the form of the workers’ effort function. Numerical simulations further illustrate our results and show that this efficiency wage effect can fully offset the sources-side incidence results found in models that omit it.
Media and U.S. Foreign Disaster Relief
Abstract: This paper studies the influence of media, both traditional TV news and emerging internet news, on U.S. foreign disaster aid. The Office of U.S. Foreign Disasters responds to an average of 65 disasters every year, spending 2.8 billion dollars. Due to the high stakes, it is essential that relief expenditure is determined by need rather than other factors. Given limited public attention, other breaking news stories covered in TV programs or surging in Google search trends crowd out oversea disaster news. Using this distraction as an instrument, I explore whether disasters occurring at the same time as other newsworthy events are less likely to receive OFDA relief. The results show a weak crowding out effect in TV news coverage of disasters and other breaking news. However, contrary to a previous study, OFDA relief during 2000-2019 is affected by the severity of the disasters but not by the attention they receive online or in TV news or the intensity of other contemporaneous breaking news.
Costly Attention and Energy Efficiency Gap: An Experiment
Abstract: This paper studies rational inattention in an overwhelming information environment, one of the main explanations for the existence of the energy efficiency gap. I conducted an incentivized laboratory experiment simulating a car purchase decision using complex fuel efficiency information. I evaluated the effectiveness of the EPA’s information provision effort and used an inventive-compatible mechanism to elicit subjects’ true willingness to pay for fuel economy labels, a fuel cost calculator and knowledge of their financially optimal car. When presented with the fuel economy information in basic text format, around half of the subjects chose suboptimal options. Fuel economy labels do not improve subjects’ decisions, but the fuel cost calculator significantly reduces their misoptimization by 62%.