Published papers in economics
Martin, L. (2022). "Driving on Sunbeams: Interactions Between Price Incentives for Electric Vehicles, Residential Solar Photovoltaics and Household Battery Systems." Economic Papers, 41(4), 369-384.
Byrne, D., L. Martin, and J.S. Nah (2022). "Price Discrimination by Negotiation: A Field Experiment in Retail Electricity." Quarterly Journal of Economics. 137 (4), 2499–2537. SSRN (ungated).
Martin, L. and K. Zhang (2021). "Changing Population Exposure to Pollution in China’s Special Economic Zones." AEA Papers and Proceedings. 11, 406-09.
Byrne, D. and L. Martin (2021). "Consumer Search and Income Inequality." International Journal of Industrial Organization. 79:102716.
Byrne, D., L. Martin, and A. La Nauze (2021). "An Experimental Study of Monthly Electricity Demand (In)elasticity." Energy Journal. 42(2), 205-222. SSRN (ungated)
Byrne, D., L. Martin, and A. La Nauze (2018). "Tell Me Something I Don't Already Know: Informedness and the Impact of Information Programs." Review of Economics and Statistics. 100(3): 510-527.
Reynolds, M., B. Sullivan, E. Hallstein, S. Matsumoto, S. Kelling, M. Merrifield, D. Fink, A. Johnston, W. Hochachka, N. Bruns, M. Reiter, S. Veloz, C. Hickey, N. Elliott, L. Martin, J. Fitzpatrick, P. Spraycar, G. Golet, C. McColl and S. Morrison (2017). "Dynamic Conservation for Migratory Species." Science Advances 3(8), Aug 23, 2017.
Martin, L., S. Nataraj, and A. Harrison (2017). "In with the Big, Out with the Small: Removing Small-Scale Reservations in India." American Economic Review, 107(2): 354–386.
Harrison, A., L. Martin, and S. Nataraj (2017). "Green Industrial Policy in Emerging Markets" Annual Review of Resource Economics, 9: 5.1-5.22.
Harrison, A., L. Martin, and S. Nataraj (2012). "Learning Versus Stealing: How Important are Market-Share Reallocations to India's Productivity Growth?" World Bank Economic Review, 27(2), 202-228.
Main working papers
"How nudges create habits: theory and evidence from a field experiment" with David Byrne, Lorenz Goette, et al. SSRN August 2023 draft.
We run a field experiment that monitors behavioral responses to nudges at a high frequency during and post-treatment and varies the duration of treatment cycles. We document asymmetry: treatment effects emerge immediately with nudges, neither grow nor wane with continued treatment, and gradually decay after nudges stop, taking longer to decay the longer the duration of treatment. To study the underlying behavioral mechanism for these dynamics, we extend the traditional consumption-based model of habit formation to incorporate salience and the possibility of state-dependent attention. We structurally estimate the model and find that a dynamic attention-based mechanism best predicts consumption responses to nudges in our context, both in and out of sample. Through counterfactual simulations, we illustrate the importance of identifying the underlying behavioral mechanism by contrasting implications of consumption- and attention-based habit formation when designing nudge interventions for sustained behavioral change.
"The Unequal Burden of Congestion Created by Autonomous Vehicles" with Zan Fairweather. SSRN May 2023, short paper.
We provide a framework for thinking about the distributional implications of Autonomous Vehicle (AV) adoption and back-of-the-envelope estimates of their potential magnitude. We focus on the anticipated congestion caused by AV-induced demand for road use in the short to medium run, when AVs mitigate the negative experience of congestion by adopters, lowering their private cost of driving, without reducing associated externalities. Given the expectation that adoption is likely to initially skew towards higher-income drivers, we show that AVs will distort the experience of existing and exacerbated congestion externalities towards lower-income commuters. Finally, we show that disproportional impacts are most likely in congestion-prone cities where many higher-income commuters currently take public transit.
"Which drivers, which trips? The effectiveness and distributional impacts of congestion-targeted road use prices" with Sam Thornton. Nov 2017 draft on SSRN, latest on request.
We use a large field experiment to document who responds to road use prices and explore the extent to which distance, time of day, and location-based charges would actually reduce congestion. The experiment collected six-second location data from GPS transponders installed in 1400 vehicles over a nine month period and implemented different prices via a system of credit accounts. Although we find an average price elasticity of -0.11 to uniform per kilometer charges, which is consistent with the literature on short- term demand response to fuel price increases, we provide evidence that in the short-run higher fuel taxes reduce driving without reducing driving that contributes to congestion. Under the price reforms that we test, drivers primarily drop trip segments that were not contributing greatly to congestion externalities, like repeat trips to grocery stores. Finally, we show that because low-income drivers contribute least to congestion externalities and respond most to road use charges, they would be better off if existing sources of road revenues were replaced with fees that better reflect each driver’s contribution to road use externalities.
"I'm Sitting This One Out: What non-participants reveal about counterfactual emissions" with Kim Liu.
In a voluntary emissions-reductions system, regulators must evaluate and sign off on firms' claims of what they would do absent credits. This paper uses the behavior of non-participants to ex-post evaluate these claims. We focus on carbon offset projects in industrial energy efficiency, co-generation, input substitution, and fuel switching that are supplied by firms in India to the international emissions trading market through the Clean Development Mechanism (CDM). We identify the firms involved in over 600 CDM projects in a comprehensive dataset of Indian manufacturing firms. We first look for signs of strategic selection into program participation. After controlling for firm size and industry, there is no evidence that applicants are more likely to have decreasing emissions trends pre-application. We then evaluate behavior ex-post. We find that participants indeed reduce emissions intensity relative to similar non-participant firms, but in a way that is moderated by a greater expansion of output. Looking across project types, the largest emission reductions come from projects that improve energy efficiency and export excess energy to the grid. Fuel switching and input blending projects are more questionable recipients of credits because non-participants engage in these activities at similar rates.
Papers temporarily on pause
"When do Firms Go Green? Comparing Price Incentives with Command and Control Regulations in India" with Ann Harrison, Ben Hyman, and Shanthi Nataraj. NBER working paper.
Command-and-control (CAC) environmental regulation is commonly believed to deliver environmental outcomes at very high cost. We study establishment-level responses in a large developing country to a set of centrally-imposed but locally-implemented CAC policies. We observe increased investments in abatement equipment and reduced coal use, especially in regions that previously had a poor record of compliance with local environmental regulations. We also document a previously under-discussed margin for protecting high-value areas in countries that are growing rapidly: deterred entry by high-polluting industries into regulated zones. We show that under the CAC policies compliance and productivity costs were borne exclusively by targeted industries and firms. In contrast, variation in coal prices unrelated to the regulation lead to reductions in coal use across all firms. Our estimated coal price elasticity suggests that a 15-30% excise tax would be needed to generate reductions in coal consumption equivalent to those produced by these CAC policies.
"When Giants Take Steps: The impact of conservation targets on China's largest energy-consuming firms," with Miao Liu.
Due to increasing coal use and related emissions, in 2006 the Chinese government mandated that the top 1000 energy-using firms adopt strict targets for reducing industrial energy consumption. This paper exploits the structure of the Top 1000 program to investigate the costs and benefits of an energy efficiency program in a rapidly industrialising economy. We match the Chinese Annual Census of Industrial Enterprises of over 200,000 firms per year with Top 1000 participation data and city-level air quality and economic outcomes. We find that although participating firms' productivity grows slower than that of non-participating firms, the difference in growth rates is very small (less than 1%). Although we cannot rule out that overstated compliance lowered program cost, we find significant improvements in city-level air quality associated with the program, suggesting that firms did indeed respond.
"Energy efficiency gains from trade: greenhouse gas emissions and India's manufacturing sector" 2011-2012 JMP.
Using 19 years of annual data from over 30,000 firms, I show that India's 1991 trade liberalization and market reforms lead to within-firm improvements in energy efficiency and reallocation of market share to more energy-efficient firms. This shift mitigated post-liberalization growth in energy use and associated greenhouse gas emissions. Two mechanisms led to increases in emissions intensity: increasing generator use post-liberalization and decreasing tariffs on intermediate material inputs, which helped firms that use inputs inefficiently to retain market share. But reductions in tariffs on intermediate capital inputs led to a 23% improvement in within-firm fuel efficiency. And liberalization of FDI and licensing requirements led to reallocations of market share to more fuel-efficient firms, further reducing emissions.
Older work (system dynamics, climate change adaptation)
L. Martin, et al. (2007) "Gaming with a microworld of a local product chain in the Oder river basin, Lower Silesia, Poland.” Simulation & Gaming, special issue on Natural Resource Management. Volume 38 , Issue 2, pp. 211 – 232.
Sexton, S., L. Martin, and D. Zilberman. "Biofuel and Biotech: A Sustainable Energy Solution." ARE Update, Vol. 9, No. 3, Jan/Feb, 2006.
Newman, J., L. Martin (2005). "A Poverty and Social Impact Analysis of the Cost of Pension Reform in Bolivia." World Bank, Washington DC.
Newman, J., M. Velasco, L. Martin, A. Fantini (2003). "A System Dynamics Approach to Monitoring and Evaluation at the Country Level: An Application to the Evaluation of Malaria-Control Programs in Bolivia." Fifth Biennial World Bank Conference on Evaluation and Development Evaluating Development Effectiveness: Challenges and the Way Forward Washington, DC 15-16 July 2003.
Freeman, P., L. Martin, R. Mechler, K. Warner with P. Hausman (2002). "Catastrophes and Development, Integrating Natural Catastrophes into Development Planning," Disaster Risk Management Working Paper Series No. 4. Washington DC, World Bank.