Colin Vance

Economic Impacts from the Promotion of Renewable Energy Technologies - The German Experience

The allure of an environmentally benign, abundant, and cost-effective energy source has led an increasing number of industrialized countries to back public financing of renewable energies. Germanys experience with renewable energy promotion is often cited as a model to be replicated elsewhere, being based on a combination of far-reaching energy and environmental laws that stretch back nearly two decades. This paper critically reviews the current centerpiece of this effort, the Renewable Energy Sources Act (EEG), focusing on its costs and the associated implications for job creation and climate protection. We argue that German renewable energy policy, and in particular the adopted feed-in tariff scheme, has failed to harness the market incentives needed to ensure a viable and cost-effective introduction of renewable energies into the countrys energy portfolio. To the contrary, the governments support mechanisms have in many respects subverted these incentives, resulting in massive expenditures that show little long-term promise for stimulating the economy, protecting the environment, or increasing energy security.

Identifying the Rebound - Evidence from a German Household Panel

Using a panel of household travel diary data collected in Germany between 1997 and 2005, this study assesses the effectiveness of fuel efficiency improvements by estimating the rebound effect, which measures the extent to which higher efficiency causes additional travel. Following a theoretical discussion outlining three alternative definitions of the rebound effect, the econometric analysis generates corresponding estimates using panel methods to control for the effects of unobservables that could otherwise produce spurious results. Our results, which range between 57% and 67%, indicate a rebound that is substantially larger than obtained in other studies, calling into question the efficacy of policies targeted at reducing energy consumption via technological efficiency.

Neoliberal Policy and Deforestation in Southeastern Mexico: An Assessment of the PROCAMPO Program

Abstract A lingering question in economic geography is the degree to which there is a link between neoliberal policies and environmental degradation. Research is needed to relate such policies empirically to local-level decision making, both to evaluate their consequences and to contribute to an understanding of how cross-scalar dynamics drive processes of land-use change. This study examines the environmental impacts of a Mexican rural support program, referred to by its Spanish acronym, PROCAMPO, which was introduced in 1994 as part of a comprehensive agenda to liberalize the agricultural sector. Using both descriptive analyses of the study region’s political ecology and econometric modeling, we draw on a panel of farm-household data spanning 1986–1997 to assess the impact of PROCAMPO on land-use change in southeastern Mexico. The results indicate that the program has had the unintended effect of fostering deforestation and has led to an only modest increase in market production. These findings suggest that alternative mechanisms may be needed to achieve the market integration and agricultural modernization sought by neoliberal policies and that such policies may have to be restructured to avoid unintended environmental impacts. By connecting macro-level economic phenomena with regional and local environmental impacts, this study addresses the linkages of cross-scale human-environment interaction.

Heterogeneity in the Rebound Effect – Further Evidence for Germany

Rebound effects measure the behaviorally induced off set in the reduction of energy consumption following efficiency improvements. Using both panel estimation and quantile-regression methods on household travel diary data collected in Germany between 1997 and 2009, this study investigates the heterogeneity of the rebound effect in private transport. With the average rebound effect being in the range of 57% to 62%, our results are in line with a recent German study by FRONDEL, PETERS, and VANCE (2008), but are substantially larger than those obtained from other studies. Furthermore, our quantile-regression results indicate that the magnitude of estimated fuel price elasticities - from which rebound effects can be derived - depends inversely on the households driving intensity: Households with low vehicle mileage exhibit fuel price elasticities, and hence rebound effects, that are significantly larger than those for households with high vehicle mileage.

Willingness-to-Pay for Energy Conservation and Free-Ridership on Subsidization - Evidence from Germany

Understanding the determinants of home-efficiency improvements is significant to a range of energy policy issues, including the reduction of fossil fuel use and environmental protection. This paper analyzes retrofit choices by assembling a unique data set merging a nationwide household survey from Germany with regional data on wages and construction costs. To explore the influence of both heterogeneous preferences and correlation among the utility of alternatives, we estimate conditional-, random parameters-, and error components logit models that parameterize the influence of costs, energy savings, and household-level socioeconomic attributes on the likelihood of undertaking one of 16 renovation options. We use the model coefficients to derive household-specific marginal Willingness to Pay estimates, and with these assess the extent to which free-ridership may undermine the effectiveness of recently implemented programs that subsidize the costs of retrofits.

Modeling the Determinants of Semi-Subsistent and Commercial Land Uses in an Agricultural Frontier of Southern Mexico: A Switching Regression Approach

The authors analyze the consequences of imperfect output markets for the land-use decisions of semi-subsistence farmers in an agricultural frontier of southern Mexico. The approach is motivated by previous applications of the agriculture household model establishing that the farm household’s productionand consumptiondecisions are analytically nonseparable when markets are not used. Econometric results generated by a switching regression model suggest the importanceof distinguishing the discrete choiceof market participation from thatof area cultivated.

The determinants of bicycle helmet use: evidence from Germany.

Previous research has shown that the risks of serious injury or death from bicycling can be mitigated by the decision to wear a helmet. Drawing on a nationwide household survey conducted in 2008 in Germany, this analysis investigates the determinants of voluntary helmet use through a combination of descriptive analyses and econometric methods, the latter relying on variants of the probit- and heteroskedastic probit model. Confirming results uncovered elsewhere in the literature, we find that household demographics, residential location, and riding patterns are significant correlates of helmet use. Contrasting with other studies, however, we also find that women are significantly less likely to use a helmet than men, a discrepancy that holds over most of the adult life-cycle. The paper concludes by highlighting the scope for designing strategic information campaigns to promote helmet use.

Gender and the Automobile: Analysis of Nonwork Service Trips

With a focus on individual motorists in car-owning households in Germany, this analysis econometrically investigates the determinants of automobile travel for nonwork service activities against the backdrop of two questions: (a) Does gender play a role in determining the probability of car use and the distance driven? and (b) If so, how is this role mitigated or exacerbated by other socioeconomic attributes of the individual and the household in which he or she resides? Drawing on a panel of data collected between 1996 and 2003, Heckmans sample selection model is specified to control for biases that otherwise could arise from the existence of unobservable variables that determine both the discrete and the continuous choices pertaining to car use. The results indicate that although women, on average, undertake more nonwork travel than men, they undertake less such travel by car, implying a greater reliance on other modes. Moreover, employment status, age, the number of children, automobile availability, and the proximity to public transit are all found to have significantly different effects on the probability of nonwork car travel between men and women but—with the exception of automobile availability—not on the distance driven. Taken together, these results suggest that policies targeted at reducing automobile dependency and associated negative externalities, such as congestion, are unlikely to have uniform effects across the sexes. These findings have implications for both policy evaluation and travel demand forecasting.

Do fewer people mean fewer cars? Population decline and car ownership in Germany

Drawing on household data from Germany, this study econometrically analyzes the determinants of automobile ownership, focusing specifically on the extent to which decreases in family size translate into changes in the number of cars at the national level. Beyond modeling several variables over which policy makers have direct leverage, including the proximity of public transit, fuel prices and land use density, the analysis uses the estimated coefficients from a multinomial logit model to simulate car ownership rates under alternative scenarios pertaining to demographic change and other socio-economic variables. Our baseline scenario predicts continued increases in the number of cars despite decreases in population, a trend that is attributed to continued increases in household income.

Fixed, Random, or Something in between? A Variant of Hausman’s Specification Test for Panel Data Estimators

This paper proposes a variant of the classical HAUSMAN specifi cation test commonly employed to decide whether the estimation of a random-eff ects model is a viable alternative to estimating fi xed eff ects. Whereas the classical test probes the equality of fi xed- and random eff ects, the proposed variant focuses on the equality of between-groups and fi xed-eff ects coeffi cients. While both test procedures lead to the same conclusions, the panel model specifi cation underlying our testing strategy facilitates the simultaneous estimation of the fi xed- and between-groups eff ects. As a consequence, we are able to examine both the equality of the whole range of coeffi cients as well as that of individual variables. The usefulness of the test is illustrated using a panel of household travel data for Germany.