Anshuman Sahoo

Relating Product Prices to Long-Run Marginal Cost: Evidence from Solar Photovoltaic Modules†

A basic tenet of microeconomics is that for a competitive industry in equilibrium the market price of a product will be equal to its marginal cost. This paper develops a model framework and a corresponding empirical inference procedure for estimating longrun marginal cost in industries where production costs decline over time. In the context of the solar photovoltaic (PV) module industry, we rely primarily on firm-level financial accounting data to estimate the long-run marginal cost of PV modules for the years 2008–2013. During those years, the industry experienced both unprecedented price declines and significant expansions of manufacturing capacity. We compare the trajectory of average sales prices with the estimated long-run marginal costs in order to quantify the extent to which actual price declines were attributable to reductions in production costs. The trajectory of estimated product costs is then extrapolated to forecast an equilibrium trend line for future PV module prices.

Engaging the human in the design of residential energy reduction applications

Most online energy conservation interfaces assume that information provision is sufficient to induce behavior change and energy use reductions. A gap between behavioral theory and field practice partly explains why interfaces have not achieved this goal. In this paper, we describe a research program on human centered interactive interface design that bridges this gap with consumer based investigation of two energy reduction interfaces: Kidogo and Powerbar. Kidogo allows users to donate savings from energy conservation to public goods. In the first study, which examines Kidogo components, we investigate how alternative beneficiaries help users to connect emotionally with saving energy. In our second study, comparing Kidogo and Powerbar interventions, we investigate the ability of affectively and cognitively framed interfaces to persuade individuals to perform conservation behaviors. The first study suggests that interfaces should use negative valence images to establish an emotional connection, and the second provides evidence that affectively framed interfaces promote willingness to perform conservation behaviors.