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  5. Infrastructure, Environment, and Market Response
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Infrastructure, Environment, and Market Response

Paper Session

Monday, Jan. 5, 2026 10:15 AM - 12:15 PM (EST)

Philadelphia Marriott Downtown, Room 404
Hosted By: International Association for Energy Economics
  • Chair: Alberto Lamadrid, Lehigh University

Polluting and Commuting: Evidence From Louisiana Housing Prices

Mary Peshoff
,
Louisiana State University

Abstract

This paper examines the impact of industrial air pollution on the Louisiana real estate
market--particularly the sale price of homes and the number of homes sold. Changes in
weather patterns at industrial facilities impact the transport and dispersion of pollution
from those facilities from one year to another. These changes in weather provide an
exogenous source of variation in pollution concentrations observed at homes over time,
which is exploited through the NOAA's HYSPLIT model. Examining the near universe of
home sales in Louisiana from 1998-2018, results show that real estate sales decrease with
increases in pollution concentration, and that those decreases in sales are concentrated
among lower-valued homes, while higher-valued homes sell more.

Sequential Investment Under Uncertainty

Carl Ullrich
,
James Madison University
Stein-Erik Fleten
,
Norwegian University of Science and Technology

Abstract

We investigate sequential investment in electric power generators in PJM. We classify proposed generators into four stages, Planning, Construction, Indefinitely Postponed, and Canceled. We find that duration in Planning, project size, and capacity (RPM) prices have stable and meaningful effects on transitions: longer time in Planning reduces the probability of Construction and increases the probability of Cancellation; larger projects move slowly; and higher capacity prices shift probability mass from Planning to Construction without increasing Cancellation. We contribute a novel method to quantify resistance (Headwinds) and uncertainty (Turbulence) in the planning process. We show that an increase in uncertainty (Turbulence) is associated with a lower probability that a proposed fossil fuel generator remains in Planning and a higher probability of entering Construction.

Digital Dispatch and Demand Response during Grid Emergencies: Evidence from Household Cooling in California’s Flex Alerts

Maghfira Ramadhani
,
Georgia Institute of Technology
Soren Anderson
,
Michigan State University
Dylan Brewer
,
Georgia Institute of Technology

Abstract

We study the interaction between moral suasion and automation in managing resource scarcity. Using data from smart thermostats during a California heatwave, we exploit a natural experiment involving voluntary conservation requests (Flex Alerts) and a statewide emergency phone alert. We document three findings. First, standard moral suasion suffers from rapid habituation. Second, high-salience signals (emergency alerts) reverse this habituation. Third, and most importantly, we identify a novel complementarity between salience and automation. High-salience alerts reduce the rate at which users override automated thermostat adjustments, tripling the efficacy of demand response technology. These results suggest that ’human frictions’ limit the scalability of smart technologies, but crisis salience can mitigate these frictions.

Economic Impacts of the Green Transition: Evidence from Korean Gas Stations

Soojin Jo
,
Yonsei University
Ian Choi
,
Yonsei University
Jaehyeok Lee
,
Yonsei University
Myungkyu Shim
,
Yonsei University

Abstract

The transition to a carbon-free economy presents challenges for industries dependent on
conventional energy. This study investigates how expanding electric vehicle (EV) chargers
influences fuel prices and gas station presence in South Korea. Leveraging a unique policy
intervention mandating EV charger installations in apartments, we employ apartment units
constructed before EV introduction as an instrument. We find that 100 additional chargers
per city area lowered gasoline and diesel prices by 7.4% and 8.7%, respectively, from 2011
to 2023, without affecting gas station numbers. This suggests that EV charger expansion
may inadvertently slow EV adoption by keeping fuel costs lower.
JEL Classifications
  • Q4 - Energy