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Full-Text Articles in Social and Behavioral Sciences
Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data, Gilbert E. Metcalf, Kevin A. Hassett
Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data, Gilbert E. Metcalf, Kevin A. Hassett
Gilbert E. Metcalf
An important factor driving energy policy over the past two decades has been the "energy paradox," the perception that consumers apply unreasonably high hurdle rates to energy-saving investments. We explore one possible explanation for this apparent puzzle: that realized returns fall short of the returns promised by engineers and product manufacturers. Using a unique data set, we find that the realized return to attic insulation is statistically significant, but the median estimate (9.7%) is almost identical to a discount rate for this investment implied by a CAPM analysis. We conclude that the case for the energy paradox is weaker than …
Investment With Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?, Gilbert E. Metcalf, Kevin A. Hassett
Investment With Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?, Gilbert E. Metcalf, Kevin A. Hassett
Gilbert E. Metcalf
The authors consider the impact of tax policy uncertainty on firm level and aggregate investment, comparing investment behavior when uncertainty is due to a shock following geometric Brownian motion (GBM) versus when random discrete jumps in tax policy occur. Expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty. Aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional GBM model but can be enhanced in the jump …
A Distributional Analysis Of Green Tax Reforms, Gilbert E. Metcalf
A Distributional Analysis Of Green Tax Reforms, Gilbert E. Metcalf
Gilbert E. Metcalf
I measure the distributional impact of a shift toward greater reliance on environmental taxes (a green tax reform) using both annual and lifetime income measures to rank households. An environmental tax reform can be designed that has a negligible impact on the income distribution when the funds are rebated to households through reductions in the payroll tax and personal income tax. I also analyze trade-offs among competing goals of efficiency, equity, and ease of administration in the design of a green tax reform.