Research
2022
- Preferences and Investments in Electric Vehicle Fast Charging: A Study of Tesla’s Supercharging Network (Job Market Paper)
Abstract: Promoting electric vehicles (EVs) has been a major goal of the US government to combat climate change, but the role that the EV fast charging network plays is relatively understudied. In this paper, I investigate Tesla‘s investment in its network of fast charging stations (called Supercharging stations) as a tool to increase the attractiveness of its EVs and how that incentive interacts with EV purchase subsidies. I develop a structural model that consists of three components: consumer demand for new vehicles, pricing competition among automakers, and Tesla’s investment in its Supercharging network. The demand model incorporates consumer heterogeneity reflecting fast charging accessibility in their home counties and along their travel routes. Tesla‘s investment decision features various locations in communities and along highway corridors, and is rationalized by the profitability of its vehicle sales. I follow the revealed preference approach used by Holmes (2011) and Houde et al. (forthcoming) to set-identify investment cost parameters. The results show that consumers value access to in-community and along-highway fast charging almost equally, and the presence of either is equivalent to a 4 percent drop in vehicle prices. The counterfactual analysis shows that EV purchase subsidies have an expansionary effect on the Supercharging network. The effect is larger for in-community locations and depends on the demographics of the location. This paper also shows that ignoring the effect of the Supercharging network on demand or Tesla’s adjustments to its network underestimates the positive effect of EV purchase subsidies on consumer welfare and emission reductions.
- Consumer Valuation of Network Convenience: Evidence from the Banking Industry (with Hui Wang and Andrew Ching)
Abstract: This paper develops and estimates a structural demand model which incorporates consumer preferences for geographical convenience of retailers’ networks. Unlike the previous literature, which assumes consumers only care about retailer’s outlet located closest to their home locations, our model explicitly allows consumers to consider two outlets of a retailer located nearest their home and work locations, respectively. We apply our model to the U.S. retail banking industry. To estimate our model, we use the U.S. Journey to Work dataset to obtain consumers’ home and work locations in the population, and combine it with a dataset that details each branch’s deposit and location of 132 isolated cities. The results show that consumers value the proximity of outlets to home and work locations roughly equally. In the counterfactual experiments, we evaluate the impact of various Work From Home policies on how consumers value a bank’s branch network. In the baseline counterfactual experiment, where everyone is assumed to work from home, the market shares of banks specializing in serving work locations drop by 0.7 percentage point (which is 8.6% of the mean market share in the data).
- The Effect of the COVID-19 Pandemic Recession on Less Educated Womens Human Capital: Some Projections (with Mark Drozd and Robert Moffitt)
Abstract: The recession induced by the COVID-19 pandemic resulted in major declines in employment of women, both from the demand side as firms reduced employment and from the supply side resulting from school closures and the closing of many child care facilities. We provide projections of possible impacts of this reduction on less-educated women’s future human capital framed within the traditional Mincerian model that implies that wage growth falls if a recession reduces the growth of work experience. Using a modified form of that model, we estimate the impact of recession-induced loss of work experience on wages on pre-COVID data and project impacts following COVID. We project that wage losses one year out from 2020 are relatively modest on average but larger for married women than for unmarried women and for those working in COVID-impacted industries. For married women, it is more severe for younger married mothers, for younger and older married childless women, and for married mothers with older children. School closures are also important for married women with school-age children and increase negative wage impacts by 50 percent. An increase in part-year work projected to occur during the pandemic increases the size of human capital losses.