BIG DATA FOR ENERGY AND ENVIRONMENTAL ECONOMICS RESEARCH

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 1009833
• Project Start Date: Dec 15, 2017
• Project End Date: Sep 30, 2022
• Program Code: [(N/A)]- (N/A)

Recipient Organization
UNIVERSITY OF ILLINOIS
2001 S. Lincoln Ave.
URBANA,IL 61801

Performing Department
Agricultural & Consumer Economics

Non Technical Summary
New sources of information and measurement are transforming research in microeconomics and the evaluation of public policy. This revolution includes data provision from earth orbiting satellites, mobile devices, web-based consumer platforms, and social media. While these technologies are not typically designed with economic or policy research in mind, they mediate relationships between individuals, firms, regulators, and the physical environment itself, providing opportunities to more directly study these relationships and make fundamental advances in economics and policy research. These information sets differ from conventional data used in economics research, in terms of their scale, structure, collection, and regulation.Capitalizing on this information in research therefore requires auxiliary computational resources and skills and opens the door to new statistical and analytical opportunities and challenges.

Animal Health Component

50%

Research Effort Categories

Basic

50%

Applied

50%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
605	6040	3010	50%
605	6010	3010	50%

Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
6040 - Real estate; 6010 - Individuals;

Field Of Science
3010 - Economics;

Keywords

big data

traffic congestion

congestion externalities

energy upgrades

environmental amenities

urban development

regulatory restrictions

public policy

Goals / Objectives
Bring big data to bear on the following fundamental research areas: 1. Measure the marginal cost of traffic congestion in developing country cities and evaluate the impacts of regulatory restrictions on congestion externalities. 2.Examine the underperformance and improve outcomes in the largest energy efficiency program in the United States using a machine learning and experimental approaches.

Project Methods
Procedures are listed below for each of the objectives listed above. Research activities will be centered in the Department of Agricultural and Consumer Economics and the National Center for Supercomputing Applications at the University of Illinois. Research projects will involve collaboration between students and staff in ACE and the department of Computer Science.Using Big Data and a Field Experiment to Understand the Energy Efficiency Investment GapWAP investments are authorized and prioritized using either: (1) a model that computes the expected costs and projected benefits of all possible improvements upon the completion a home energy audit or (2) a priority list that lists what measures should be done if appropriate. Overestimation biases in projected benefits will lead to suboptimal investments and underperformance. Using the reported cost of each improvement technology and ex post estimates of the realized benefits of tens of thousands of technology bundles, this project will examine the effect of model bias on program performance. More specifically, empirical estimates will allow me to identify the highest return technological investments and explore the impact of re-optimization of WAP investments using ex post evidence rather than ex ante projections. By analyzing approximately a decade of energy consumption data for WAP households, I will also offer some of the first evidence on the persistence of WAP savings over time and across measures.State of the Research on Model Bias: Many analyses of energy efficiency programs have demonstrated lower gains ex post relative to model projections, revealing a gap between the expected and actual returns on investments in energy efficiency across several settings. I will be able to predict the energy savings from efficiency upgrades on a measure by measure basis. We will focus on homes across the state of Illinois, a much larger area, with much more winter heating than services areas examined in prior work. Our findings will be relevant not only for the future prioritization of measures for the federal WAP, but especially for the design of future energy efficiency policies with similar climates. In addition, we will be able to estimate the persistence of energy savings on a measure by measure basis over time. To our knowledge, research on the WAP to date has focused on savings shortly after investments have been undertaken and no study has investigated the persistence of energy savings from these retrofits.Quantify the effects of the Flint, Michigan Water Crisis using a hedonics approach with big data:This project uses event study and differences-in-differences and event study econometric research designs to study housing market responses to increases in lead contained in the city of Flint's water distribution system. I will examine how the crisis affected housing prices, the number of sales, and foreclosures. I will use data that provide the exact location of Flint's water distribution infrastructure along with the universe of parcel-level housing transactions occurring within Flint and similar markets at different stages of the crisis. These data allow us to precisely differentiate between properties transacted before and after key events.I also take advantage of access to a nearly complete universe of housing market transactions in the U.S. to select our counterfactual markets. This is important since the economic conditions in Flint leading up to the crisis provide a challenge for understanding how Flint's housing market would have evolved in the absence of the crisis. To overcome this obstacle, I select control cities based on matched city-level socioeconomic and demographic variables. To explore heterogeneity in the housing market response within Flint, I will combine residential sales data with parcel-level information on service line material (e.g., lead and copper). These lines received considerable attention from policy makers and the popular press as sources of lead contamination within the wider water distribution system. I additionally utilize data from approximately 25,000 publicly available lead tests to examine the effect of this information on housing values within a tight radius around a new test.

Progress 10/01/19 to 09/30/20

Outputs
Target Audience:Members of the target audience include the research community, policy community, and industry. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Multiple graduate students received research training through their participation in the project. How have the results been disseminated to communities of interest?Through journal articles, public events, and popular press interviews. What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? We developed an entirely new machine learning method to improve the allocation of funds to retrofits in energy efficiency programs. We also completed and submitted a study of the effect of mobility-on-demand services on congestion externalities in developing countries.

Publications

• Type: Journal Articles Status: Published Year Published: 2020 Citation: Ang, A., Christensen, P. and Vieira, R. 2020. Should Congested Cities Reduce their Speed Limits? Evidence from Brazil. Journal of Public Economics: 184.
• Type: Journal Articles Status: Under Review Year Published: 2020 Citation: Christensen, P., Myers, E., Francisco, P. and Souza, M. 2019. Decomposing the Wedge: Mechanisms Driving the Gap Between Projected and Realized Returns from Energy Efficiency Programs.
• Type: Conference Papers and Presentations Status: Published Year Published: 2020 Citation: Christensen, P. 2020. The Demand for Mobility: Experimental Evidence from a Field Experiment with Uber. Selected paper presented at Advances in Field Experiments, University of Chicago, September, 2020.
• Type: Journal Articles Status: Under Review Year Published: 2020 Citation: Christensen, P. 2020. The Demand for Mobility: Experimental Evidence from a Field Experiment with Uber. (Under Review).
• Type: Journal Articles Status: Under Review Year Published: 2020 Citation: Christensen, P., Francisco, P., Myers, E., Shao, H. and Souza, M. 2020. Machine Learning Can Increase The Impact of Energy Efficiency Programs. (Under Review).

Progress 10/01/18 to 09/30/19

Outputs
Target Audience:Members of the target audience include the research community, policy community, and industry. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Significantpublication on transportationexternalities in developing country cities. Onenew projecton transportationexternalities in developing country cities. New working paper on weatherization assistance program. Completed experiment on weatherization.Multiple conference presentations of research on transportation and energy efficiency.

Publications

• Type: Journal Articles Status: Awaiting Publication Year Published: 2020 Citation: Ang, A., Christensen, P. and Vieira, R. 2020. Should Congested Cities Reduce their Speed Limits? Evidence from Brazil. Journal of Public Economics.
• Type: Conference Papers and Presentations Status: Published Year Published: 2019 Citation: Christensen, P. and Osman A. 2019. The Demand for Mobility: Experimental Evidence from a Field Experiment with Uber. Selected paper presented at Advances in Field Experiments, University of Chicago, September, 2019.
• Type: Conference Papers and Presentations Status: Published Year Published: 2019 Citation: Christensen, P., Myers, E., Francisco, P. and Souza, M. 2019. Decomposing the Wedge: Mechanisms Driving the Gap Between Projected and Realized Returns from Energy Efficiency Programs. Association of Environmental and Resource Economists Summer Conference, Lake Tahoe, CA, June, 2019.
• Type: Conference Papers and Presentations Status: Published Year Published: 2019 Citation: Christensen, P. and Osman A. 2019. The Demand for Mobility: Experimental Evidence from a Field Experiment with Uber. American Economic Association Meeting, San Diego, January 2020.

Progress 12/15/17 to 09/30/18

Outputs
Target Audience:Members of the target audience include the research community, policy community, and industry. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?Two PhD students trained as part of these projects. A new PhD-level course created and taught in Big Data and AppliedEconomics. How have the results been disseminated to communities of interest?Presentations to industry (Zillow/Microsoft), policy (city government of Sao Paulo, State of Illinois Weatherization Assistance Program) and research communities (American Economics Association, and Association for Environmental and Resource Economists). What do you plan to do during the next reporting period to accomplish the goals?Continue with publication of papers. Continue with experiment on weatherization. Presentations at the American Economics Association (2019), National Bureau of Economic Research (2019), and the American Association of Environmental and Resource Economists (2019).

Impacts
What was accomplished under these goals? We increased knowledge on marginal cost of congestion in developing countries cities. First paper on transport in developing countries submitted to major economics journal. We also increased knowledge on the largest energy efficiency program in the United States -- research has been presented and is in progress.

Publications

• Type: Conference Papers and Presentations Status: Accepted Year Published: 2018 Citation: Christensen, P. 2018. Economic Effects of Environmental Crises: Evidence from Flint, Michigan. American Economics Association Annual Meeting.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2018 Citation: Christensen, P. 2018. Why Should Developing Country Cities Reduce their Speed Limits? Evidence from S�o Paulo, Brazil. Association of Urban Economists.
• Type: Conference Papers and Presentations Status: Accepted Year Published: 2018 Citation: Christensen, P. 2018. Economic Effects of Environmental Crises: Evidence from Flint, Michigan. World Congress of Environmental and Resource Economists.