Thursday, November 26, 2020

Francqui Chair

I am one of the two recipients (one is Belgian and one international) of a Francqui Chair at Hasselt University. This sounds like an academic position but actually is a one year appointment during which the chair is supposed to give 10 hours of lectures in their field. I'm not sure yet what they are exactly looking for. But here are Siem Jan Koopman's planned lectures at the University of Antwerpen.


So, I'm thinking if I weave my research into a more pedagogical narrative I would be on the right track. I am hoping the lectures will be recorded and I will be able to post them here on Stochastic Trend. My coathors Stephan Bruns and Robert Malina nominated me for this award.

I am hoping I will actually be able to visit Belgium next year assuming that I will be able to access a COVID-19 vaccine.

Asymmetric Carbon Emissions-Output Elasticities

This semester my masters' research essay student, Kate Martin, revisited the topic of whether the carbon emissions-output elasticity is greater in recessions than in economic expansions. In other words, does a 1% increase in output increase carbon emissions by less than a 1% fall in output reduces them?

Sheldon (2017) used quarterly US GDP data and carbon emissions data from the 1950s to 2011 and found that the elasticity in recessions was much larger than in expansions when it was not significantly different to zero. There was also a strong positive drift in emissions of 5.8% p.a.

To measure output, Kate used monthly US industrial production data from 1973 to 2020 and monthly GDP data from 1992 that are available from Macroeconomic Advisers. The advantage of the longer time series is that it covers more recessions and expansions. She also compared this monthly data to quarterly data to test the effect of data frequency. She found that using industrial production and, in particular industrial CO2 emissions rather than total CO2 emissions from fossil fuels, the elasticity is actually larger in expansions but it is not statistically significantly different from the elasticity in recessions. Using GDP data at both monthly and quarterly frequencies and including the last decade of data confirmed Sheldon's basic result.

When Kate restricted the estimation period to the end of 2019, the resulting model projected emissions during the COVID recession (using the reported industrial production data) very well:

This difference between the effect of industrial production and overall GDP on emissions doesn't seem to have been commented on before. However, Eng and Wong (2017) used monthly industrial production data and found that in the short-run the elasticity is symmetric but in the long run the recession elasticity is larger.

Tuesday, November 17, 2020

Prepaid Metering and Electricity Consumption in Developing Countries

I've written an Energy Insight policy brief for the EEG Programme with my PhD student Debasish Das on prepaid metering and its effect on electricity consumption.

The bottom line is that consumers who are switched to prepaid metering significantly reduce their electricity consumption. 

Debasish is working on a study of the effect of prepaid metering in Bangladesh and some preliminary results are in this paper. This graph shows the estimated difference in monthly electricity consumption between consumers in two areas of Dhaka, Bangladesh around the time that one group was switched to prepaid metering:

Electricity consumption in the treated group fell by 17%. This graph didn't make it into the final version of the paper, because it was deemed to be too mathy. Debasish has a very large dataset that he obtained from the Bangladesh electric utilities. He's still working on getting this into a usable form. But hopefully we will have some more results soon.