Stanford Economists to Investigate the “Light Bulb Ban”
Stanford University has awarded nine faculty seed grants totaling $2.2 million for promising new research in clean technology and energy efficiency. Among the campus organizations funded, the Precourt Energy Efficiency Center (PEEC) – the umbrella organization for energy research and education at Stanford – will explore “The Dynamic Effects of the Light Bulb Ban.”
Primary Investigators Mar Reguant, assistant professor of Economics, and Lanier Benkard, professor of Economics, requested almost $89,000 to examine the dynamic implications of policies regulating light bulbs, investigating two sources of dynamic effects.
On the consumer side, what is the potential of dynamic preference changes that arise from policy? In particular, consumers tend to underestimate the long-run benefits of installing more efficient lighting. But with the introduction of regulation, light bulb alternatives become more salient. Does this salience also make consumers more aware of the trade-offs?
On the producer side, the investigators will study the decisions in innovation. Since the aggressive light bulb measures have been discussed and introduced, there has been a quick improvement in available lighting technologies. What prevented such innovations from happening before stricter policy was in force? Can these delays be purely explained from the behavioral inattention on the consumer side?
One of the main questions of interest is to explore the role for government policy in spurring innovation. In particular, the investigators are interested in comparing the social and private incentives to invest in lighting technologies. They will consider whether recent innovation in lighting would have been likely to happen absent government policy intervention.
“Understanding the dynamic effects of policies related to energy efficiency is an important issue,” the investigators wrote in the project abstract. “Such dynamic effects can be potentially relevant and are not always considered in the policy debate. We believe that bringing the dynamic effects into the current research, by estimating the impact of energy efficiency programs on innovation, will help inform future energy efficiency program design.”
Mar Reguant holds a PhD in Economics from MIT (2011), specializing in the field of Industrial Organization (IO). Her research focuses on the study of energy and environmental markets. Reguant’s research relies in careful modeling of electricity markets and is thus interdisciplinary by nature, often integrating tools from the engineering literature. She has also worked on understanding the potential methods of a cap-and-trade policy in the United States and California, developing dynamic industry models.
Reguant is a Faculty Research Fellow at the National Bureau of Economic Research.
C. Lanier Benkard teaches courses in Industrial Organization and Econometrics. Before coming to Stanford in 1998, he received his PhD in Economics from Yale University (1998). Benkard’s research is in the areas of empirical IO, applied microeconomics and econometrics, and concentrates on applying microeconomic and game theoretic models to the study of individual markets. His recent work has focused on developing methods that analyze IO models empirically. This includes theoretical work on how to estimate demand systems and dynamic oligopoly models, as well as empirical work that uses these techniques to analyze different industries.
Benkard is a research associate at the National Bureau of Economic Research, and is an associate editor for the Journal of Economic Dynamics and Control. He is a member of the American Economic Association and the Econometric Society.
At Stanford University, this seed funding program supports early work on concepts that have the potential for very high impact on energy production and use. A committee of Stanford faculty and senior staff awarded the grants to researchers from a broad range of disciplines, including engineering, economics and psychology.
“We received 30 proposals from across the campus,” said PIE Director Lynn Orr, a professor of energy resources engineering and member of the selection committee. “We looked for projects where the investigators had moved into new areas of energy research for which the potential payoffs justified taking the risk associated with early-stage proposals. After a lively debate, we chose nine projects with the strongest potential for impacting the supply or use of energy.”
For a complete list of projects funded click here.