New Paper forthcoming in American Economic Review
In a new paper forthcoming in American Economic Review, we study household decisions to acquire energy-using assets in the presence of rising incomes. We develop a theoretical framework to characterize the effect of income growth on asset purchases when consumers face credit constraints. We use large and plausibly exogenous shocks to household income generated by the conditional-cash-transfer program in Mexico, Oportunidades, to show that asset acquisition is nonlinear, depends, as predicted in the presence of credit constraints, on the pace of income growth, and both effects are economically large among beneficiaries. Our results may help explain important worldwide trends in the relationship between energy use and income growth.
Read the full paper here.
Prof. Paul Gertler Honored by Erasmus University in Rotterdam
Prof. Paul Gertler received an honorary degree from Rotterdam's Erasmus University in November in recognition of his extensive research in global health care. In a letter announcing the degree, Erasmus cited Gertler’s economic analysis of financial incentives in healthcare that earned him the Juan Jose Bobadilla Medal for Global Health from the Mexican National Institutes of Health in 2013. Gertler was the first economist to win the annual award, which is typically given to medical professionals or epidemiologists.
Read full press coverage here.