Working Papers
Informed Climate Adaptation: Input and Output Subsidies for Shaded Cocoa. (with Jiayue Zhang)
[ Abstract | Working Paper | Development Impact Blog | IGC Blog | PEDL | AEA Registry ]
With growing climate risks, agro-environmental policies seek to protect the environment while reducing poverty by incentivizing climate adaptation. We study how information shapes adaptation under different subsidy schemes for cocoa farmers in Ghana, where forest tree planting for shade is encouraged as an adaptation strategy. Conducting a lab-in-the-field experiment, we compare the impacts of an information intervention under an input subsidy for planting forest trees and an output subsidy for producing cocoa beans from shaded farms. While farmers receiving the information in both subsidy groups plant more forest trees than their subsidy-only counterparts, the increase is higher under the output subsidy than the input subsidy even though the information leads both groups to similarly update their beliefs about the benefits of shade. We rationalize the differential effects of information with a model in which beliefs about rainfall uncertainty and shade benefits affect ex ante input decisions. Counterfactuals show that output subsidy has greater potential to drive adaptation than input when beliefs are reasonably correct. We validate the lab results by distributing tree seedlings, finding consistent treatment effects on the number of seedlings requested and obtained.
Credit and Demand for Green Energy: Evidence from Small Firms in Kenya. (with Jiayue Zhang and Wycliffe Oluoch)
[ Abstract | Working Paper | PEDL Summary | AEA Registry ]
Firms in sub-Saharan Africa face simultaneous credit and energy constraints. Off-grid solar bundled with credit financing has the potential to relax both constraints, yet adoption among firms remains low. Understanding how firms value different components of payment structures is crucial for designing green subsidies in credit contracts. This paper evaluates firm demand for solar sold on credit by eliciting discrete choices over contracts, and experimentally compares the impact of down payment subsidies versus flexible subsidies for down payment or repayment. We find that demand is primarily driven by sensitivity to upfront costs rather than future repayments. When offered the flexibility to allocate the subsidy to the down payment or the repayment, nearly all adopters choose to reduce the upfront cost. Despite the same de facto subsidy structure, this tailored subsidy scheme positively selects less liquidity-constrained adopters and leads to greater solar usage and more operational days.
Local Favoritism and Environmental Regulation: Evidence from China. (with Xiaowei Zhang and Tiemeng Ma)
[ 2024 EPG Best Poster Award ]
Intergenerational Impact of Land Property Rights: Evidence from Land Certification Reform in Rural China.
Selected Work in Progress
Less is More; Worse is Better. (with Ming Li, Jia Xiang, and Jiayue Zhang)
[ Abstract | AEA Registry]
Information campaigns are a major policy tool for promoting climate change adaptation. Such policies often face contestation because the benefits of adaptive actions are distributed unevenly across scales: local actors prioritize private resilience while policymakers emphasize collective, long-term social gains. We examine whether information framed around private versus social benefits shifts adaptation behaviors, and whether credibility-enhancing caveats alter uptake, in the context of cocoa farming in Ghana where agroforestry is a viable but under-adopted adaptation strategy. We find that, while information on private and social benefits are separately effective in driving adaptation, combining them does not necessarily increase the information impact. We also show that providing information on the downside risks of the adaptation strategy on top of its benefits increases information credibility and subsequently boosts adoption of the adaptation strategy.
Clearing the Air on Used Vehicles. (with Eddy Zou and Xinmei Yang)
[ Abstract | Grants ]
How does the presence of international trade in used durable goods, such as vehicles, affect the efficacy and relative welfare effects of unilateral policies to decarbonize transportation? This project combines a micro-founded structural model with novel data from multiple countries, to understand the effectiveness, potential economic costs, and environmental impacts, of restricting trade in used vehicles.
Grant(s): International Growth Centre
Local Knowledge or Misallocation: Efficiency Costs of Discretion in Regulatory Enforcement. (with Ruozi Song and Bing Zhang)
