Universität zu Köln

Tode, Christian (2016). How the Behavior of Consumers and Firms Influences the Effectiveness of Policy Instruments Tackling Climate Change. Three Essays in Economics. PhD thesis, Universität zu Köln.

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Abstract

The thesis at hand seeks to improve the understanding of the impact of consumer and firm behavior on the effectiveness and efficiency of policy measures tackling climate change Therefore, the thesis includes three research papers on consumer and firm responses to energy efficiency and extraction behavior of firms owning non-renewable resources. Each paper, representing one chapter of this thesis, addresses one or more of the specific characteristics outlined above. Chapter 2 investigates the actual demand-reducing effect of energy efficiency measures and therein compares actual demand responses of consumers to technological potentials. Based on a demand system analysis of household data and by approximating unobserved energy awareness, economic and behavioral responses that counteract expected savings from energy efficiency are found. Results show strong rebound and even backfiring effects but also suggest heterogeneity of the effectiveness driven by behavioral concepts, such as sunk cost fallacy or habit formation. Understanding these can contribute to target-oriented policy designs and an increased effectiveness and efficiency of policies. In chapter 3, firm incentives to offer energy efficiency are investigated. Do firms in the energy retail market have incentives to voluntarily introduce energy efficiency? Or should informational regulation inform inattentive consumers? This chapter shows that consumer inattention and imperfect competition are the crucial drivers for firms decisions to introduce or conceal energy efficiency to costumers. Two symmetric equilibria exist: One in which both firms introduce energy efficiency and one in which both firms conceal energy efficiency. Which equilibrium firms coordinate on depends on the distribution of consumers that are attentive to energy efficiency and consumers that are not. Further, mandatory disclosure laws are found to be weakly welfare increasing. Chapter 4 extends the literature on empirical tests on the theory of non-renewable resources. This chapter extends the literature on tests of Hotelling's theory by conducting an implicit price behavior test, incorporating for the first time the concepts of market power and exploration into a single model. When applied to a newly constructed data set for the uranium mining industry, the null hypothesis of the firm optimizing inter-temporally as implied by Hotelling's theory is rejected in all settings. However, parameter estimates of the model still yield valuable information on cost structure, resource scarcity and market power. Results suggest that the shadow price of the resource in situ is comparably small at the beginning of the observations and is therefore potentially overshadowed by market power. However, even as the shadow price increases over time, firms still fail to incorporate it in their decision-making.

Item Type:	Thesis (PhD thesis)
Creators:	Creators Email ORCID ORCID Put Code Tode, Christian Christian.tode@gmail.com UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-68605
Date:	4 July 2016
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Weitere Institute, Arbeits- und Forschungsgruppen > Staatswissenschaftliches Seminar
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language energy economics, empirical microeconomics, resource scarcity, bounded rationality, industrial organization, English
Date of oral exam:	1 July 2016
Referee:	Name Academic Title Höffler, Felix Prof. Dr. Vuong, Van Anh Jun.-Prof., PhD
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/6860