(Working Paper) Welfare and Incidence of Energy Taxes: Lessons from Manufacturing Pass-Through
Research Data Analyst under Reed Walker, Joseph Shapiro, and Sharat Ganapati
This paper has two components. The first component asks: how does taxing energy used in U.S. manufacturing affect the relative welfare of manufacturing producers versus consumers? This first component also develops a general theoretical framework that can assess the incidence of taxes on production inputs. The analysis uses confidential, administrative data from the Census Bureau’s Census of Manufactures to estimate the degree to which energy price-driven changes in production costs impact consumers relative to producers (i.e., incidence). This paper’s second component asks: what are the net social welfare consequences of carbon taxes on U.S. manufacturing industries that have market power? To answer this question, the second component builds a general theoretical framework that guides estimates of optimal (second-best) Pigouvian taxes on concentrated industries. While negative pollution externalities suggest that an industry may have too much output, market power suggests that an industry may have too little. Thus, in the presence of market power, the second-best Pigouvian tax may be lower than the social cost of the externality.
(Working Paper) Should We Track Aggregate Measures of Surface Water Quality Over Time?
Coauthored with V. Kerry Smith and Carlos Valcarcel-Wolloh
This paper uses an assessment of the trends in aggregate water quality for U.S. lakes with a single standard over the years 1975 to 2011 to pose a more general question –how should policy makers track the performance of environmental policies over time? Using an aggregate index of the water quality in fresh water lakes we find that the quality is about the same or slightly lower than it was in 1975. Moreover, whether the assessment is based on an average index constructed for freshwater conditions based on dissolved oxygen or one using the same micro level index with regression fixed effects, adjusting for season and location, the conclusions are similar. Other, related research by Keiser and Shapiro  indicates that investments in treatment equipment at publicly owned treatment works can improve water quality in locations where they are implemented. Unfortunately, these findings do not allow a judgment about how the state of the nation’s waters over time. Our analysis highlights the need for environmental indexes that parallel the indexes used to track the performance of the aggregate economy over time.
(Honors Thesis) The Impact of the Consumer Price Index on the Insolvency of the Social Security Trust Fund
Social security benefits are adjusted using a fixed-weighted price index that reflects
the purchasing patterns of workers. However, some believe that a price index that captures the spending habits of the elderly should adjust monthly social security benefits, while others argue that a chain-weighted price index is a more accurate indexation technique. This paper finds that if an elderly or chain-weighted price index were implemented this year, there would not be a significant change in the projected insolvency of the social security trust fund, but there could be a substantial change in the social security trust fund’s yearly cash-flow deficit.
(Working Paper) Water and Economic Activity
Coauthored with V. Kerry Smith
This paper uses local Arizona data to assess the economic importance of water. By developing a model that constructs an employment-to-water-to-industry relationship and generating a preliminary estimate of industrial and commercial water demand in Arizona, our analysis seeks to understand how water contributes to production activities, the resiliency to water disruption, and how we should view water as a factor in location decisions by sector.