Department of Economics

Energy efficiency is a global priority, but investments in energy efficiency do not always deliver the expected benefits. This paper studies micro-irrigation systems (MIS), a technology thought to reduce the energy required for irrigation by as much as 70 percent. We installed individual meters to directly measure the energy consumption of several hundred farmers in Gujarat, India, and linked the meter data with survey data to yield a uniquely comprehensive view into energy use patterns in smallholder agriculture. We document two facts. One, energy use varies widely across farmers, and this variation is unexplained by factors such as farm area or village geography. Two, MIS users in our sample consume 30 to 40 percent more energy than non-users of MIS. This difference does not appear to be fully explained by observable differences across farmers nor by rebound effects, suggesting that the energy efficiency gains of MIS under real-world conditions may be disappointing. Our results highlight a need for increased attention to the details of implementation and further research into the actual benefits of resource-conserving technologies.

The global food system is a significant contributor to greenhouse gas emissions that drive climate change. Animal agriculture accounts for a large share of food-system emissions, both directly and through the production of animal feed. Global population growth and rising incomes imply a further increase in demand for animal-source foods if current trends persist. Limiting global warming to the targets set by the international community will not be possible without the rapid reduction of a substantial share of animal-source foods. We show that the rapid adoption of alternatives to animal-source foods, such as plant-only diets or plant-based, cultured, or fermentation-derived analogs to animal products, can be consistent with climate goals while satisfying global demand for calories and protein. Importantly, timing is crucial: the longer the delay in adopting alternatives, the larger the share of the diet that must shift away from animal-source food by 2050 for the food system to remain within its carbon budget.

Measuring the financial value of nature is difficult, often resulting in insufficient funding directed to nature conservation and restoration. As coastal risks increase due to development and climate change, a tangible benefit of nature is the protection it offers against storm damage. Many studies from the risk industry and others assess the direct effects of wetlands for reducing damage during storms. However, the value of wetlands for coastal protection could extend to many other benefits, including home prices in areas where storms are common. We use property-level housing transaction data from Zillow and show that proximity to mangroves in Florida moderates home price decline and dispersion following major hurricanes. The effects are substantial in magnitude, reducing the probability of losing a quarter or more of the housing value by 2–7 percentage points, which corresponds to 20–40-thousand-dollar value for a million-dollar property, conditional on a hurricane.

To answer this question, we develop a new Sahm-type recession indicator that combines vacancy and unemployment data. The indicator is the minimum of the Sahm indicator -- the difference between the 3-month trailing average of the unemployment rate and its minimum over the past 12 months -- and a similar indicator constructed with the vacancy rate -- the difference between the 3-month trailing average of the vacancy rate and its maximum over the past 12 months. We then propose a two-sided recession rule: When our indicator reaches 0.3pp, a recession may have started; when the indicator reaches 0.8pp, a recession has started for sure. This new rule is triggered earlier than the Sahm rule: on average it detects recessions 0.8 month after they have started, while the Sahm rule detects them 2.1 months after their start. The new rule also has a better historical track record: it perfectly identifies all recessions since 1929, while the Sahm rule breaks down before 1960. With August 2024 data, our indicator is at 0.54pp, so the probability that the US economy is now in recession is 48%. In fact, the recession may have started as early as March 2024.