Chris Bruegge
Job Market Candidate

Stanford University
Department of Economics
579 Serra Mall
Stanford, CA 94305
415-244-8274
cbruegge@stanford.edu

Curriculum Vitae

Fields:
Primary: Energy and Environmental Economics
Secondary: Industrial Organization, Public Finance

Expected Graduation Date:
June, 2018

Thesis Committee:
Frank Wolak (Primary)
wolak@zia.stanford.edu

Lawrence Goulder
goulder@stanford.edu

Charles Kolstad
ckolstad@stanford.edu

Peter Reiss
preiss@stanford.edu

Job Market Paper

Distortionary Fundraising for Energy Efficiency Subsidies: Implications for Efficient and Equitable Program Design [Appendix ] [Slides ]

State regulators in the U.S. require subsidies for energy efficient durable goods as an important piece of energy conservation policy, and spending on these programs has grown by 18% per year since the early 2000s. This paper examines the economic efficiency and distributional equity impacts of appliance subsidies on top of pre-existing regulations like the Energy Star label. Using household level data on program participation and energy usage from a large utility, I estimate a model of appliance purchase and utilization that recovers expected changes in household behavior and consumer surplus. I find that distortionary changes to the energy price used to fund the program account for over 80% of the total reductions in energy use and up to 90% of the change in consumer surplus change caused by the policy. These effects are not captured by traditional evaluations that assume non-distortionary fundraising. My results suggest the current program reduces consumer surplus even accounting for energy consumption externalities and private market failures, but could be rationalized if the regulator values wealth transfers to appliance producers on top of these other market failures. Finally, I find evidence that a fixed charge would improve both economic efficiency and progressivity of income redistribution, and that means testing the subsidy amount and applying the rebate at the point of sale would further increase both of these policy objectives



Submissions and Publications

The Distributional Effects of Building Codes [Slides ]
Journal of the Association of Environmental and Resource Economists, Revise and Resubmit
with Tatyana Deryugina and Erica Myers

State-level building energy codes have been around for over 40 years, but recent empirical research has cast doubt on their effectiveness. Building energy codes are also less efficient than price-based policies such as energy taxes. A potential offsetting benefit of standards-based policies such as building codes is that they are often perceived to be less regressive than explicit taxes on energy consumption. However, this conjecture has not been tested empirically. Using spatial variation in California's building energy code strictness created by building climate zones, combined with information on over 350,000 homes located within 5 kilometers of climate zone borders, we evaluate the effect of building energy codes on home characteristics, energy use, and sales prices. We also study building energy codes' distributional burdens. We find that stricter energy use requirements cause builders to build smaller homes, creating a reduction in both natural gas and electricity use on a per-house basis. However, once we take into account the reduced size of a home, we do not observe reductions in energy use on a per-square-foot basis and actually find increases in electricity consumption per square foot. Home prices fall due to the decreased square footage in affected homes, but prices per square foot are unchanged. Distributional analysis reveals that the poorest households are essentially unaffected by building energy codes and the richest households experience the largest distortions to home size and energy consumption. Effects for groups in the middle of the income distribution are sometimes non-monotonic.

Does the Housing Market Value Energy Efficient Homes? Evidence from the Energy Star Program
Regional Science and Urban Economics, 2016
With Carmen Carrión-Flores and Jaren Pope

The Energy Star certification of residential homes is a recent attempt in the United States to improve energy efficiency in the residential sector by incentivizing homebuilders to build green. We examine the effectiveness of this program by estimating homeowners' marginal willingness to pay for Energy Star residences in Gainesville, Florida. We use single-family residential property sales in Gainesville, Florida between 1997 and 2009. Using the hedonic method, we find that homeowners are willing to pay a premium for new Energy Star residences, but that this premium fades rapidly in the resale market.


Other Dissertation Work

A Framework for Measuring Consumer Preferecnes for Home Energy Efficiency
Draft coming soon [Slides ]

I build a model of consumer utility that links tastes for energy service consumption to preferences for home attributes, allowing high- and low-usage customers to sort into different types of homes. Building code policy changes create exogenous variation in the efficiency of the stock of homes across time, which allows me to observe similar homeowners in homes that vary in the energy efficiency dimension. I find that the highest energy users sort into the most efficient homes, and I demonstrate that accounting for this soring behavior can have important consequences for measurement of the effectiveness of building codes.


Sales Price Capitalization and Energy Savings from Building Code Changes: Evidence from Florida
Draft coming soon [Slides ]

Building codes are among the most pervasive means of dealing with the environmental externalities associated residential energy consumption. Understanding how well residential building codes alleviate housing market failures is therefore of direct policy relevance. This research looks at how building codes affect (1) energy consumption, (2) housing prices, and (3) construction costs. Previous work in this area has examined the first two effects independently, but this is the first study to jointly look at all three outcomes for the same set of homes. To identify these effects, I use temporal variation in the stringency of the Florida building code that lends itself to a regression discontinuity model. After controlling for housing characteristics and time trends, I find that homes built under more stringent building codes use the same amount of electricity as homes built under less stringent codes, but that these homes consume 4.4% less gas each month. Immediately after the code change, home prices decreased by an economically meaningful but statistically insignificant 6-14% and construction costs fell by about 4%. The results suggests that the code is helping eliminate some of the environmental externalities associated with residential energy consumption, it could be introducing other distortions into the housing market.