Research
Working Papers
“Retail Electricity Pricing and Renewable Energy Generation in the United States”
Abstract: While zero-marginal-cost renewable energy has reduced wholesale electricity prices, its effect on retail electricity prices remains uncertain. There is a common concern that costly integration investments, such as transmission buildouts, and operational responses to intermittent renewable generation impose system-level costs that may offset or even exceed savings from reduced generation costs. In this paper, I test this conjecture empirically using annual sales data from the EIA 861 and electricity generation data from the EIA 923 for the majority of the United States between 2004 and 2023. To address the inherent simultaneity between prices and electricity generation, I leverage spatial variation in wind and solar potential and time-varying levelized costs of wind and solar energy to instrument for renewable penetration. I find that a one percentage point increase in balancing authority level renewable penetration reduces the real annual average, utility-level retail rate by 0.3%, implying a 3.5% net decrease in real rates on average across the sample period. Crucially, OLS estimates that do not account for endogeneity are positively biased and insignificant. Alternative instruments and sample restrictions result in an estimated effect that is tightly bounded between -0.7% and 0.7%, suggesting that increased renewable penetration has had, at most, a modest impact on energy affordability. A back of the envelope exercise suggests that system-level costs offset roughly two-thirds of the marginal generation cost savings estimated in the literature.
“The Depth of Trade: A Text-Based Approach”
Abstract: This paper employs a hierarchical similarity analysis to develop a continuous, text-based measure of the depth of trade agreements, utilizing the legal texts of 448 WTO-notified agreements from 1949 to 2016 in the Text of Trade Agreements database. This measure is compared to two widely used alternatives: the coverage ratio and the Design of Trade Agreements Index. Using a gravity model of international trade, I demonstrate that the proposed text-based measure produces different quantitative estimates of the effects of agreement depth on international trade flows compared to existing measures.
“Sectoral Transport Mode Elasticities and International Trade” (with Jeong-won Ko and Sergey Nigai)
Abstract: We estimate sector‐specific transport-mode elasticities in international trade costs using newly available bilateral trade data disaggregated by mode and sector for 2016–2025. We rely on an instrumental-variable approach that exploits the interaction of global, mode-specific cost shocks with exogenous bilateral geography to identify elasticities for 21 manufacturing sectors. Our estimates reveal substantial heterogeneity, ranging from statistically insignificant values near zero to 12.1, with high value-to-weight sectors exhibiting greater sensitivity to transport-mode cost shocks. We embed these estimates in a multi-country, multi-sector general-equilibrium trade model with endogenous mode choice and input–output linkages. Counterfactual simulations of global changes in air-transport costs show that imposing a uniform transport-mode elasticity substantially misstates both the magnitude and cross-country dispersion of trade responses, underscoring the quantitative importance of sectoral heterogeneity in transport-mode adjustment.