Something from Nothing: Estimating Consumption Rates Using Propensity Scores, with Application to Emissions Reduction Policies

Nicholas Bardsley, Milena Buechs () and Sylke Schnepf
Additional contact information
Milena Buechs: University of Southampton

No 9707, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Consumption surveys often record zero purchases of a good because of a short observation window. Only mean consumption rates can then be inferred. We show that propensity scores can be used to estimate each unit's consumption rate, revealing the distribution. We demonstrate the method using the UK National Travel Survey, in which c.40% of motorist households purchase no fuel. Estimated consumption rates are plausible judging by households' annual mileages, and highly skewed. We apply the same approach to estimate CO2 emissions and direct outcomes of a carbon cap or tax. Analysis of such policies based solely on means appears to have a negative bias, because of skewness of the underlying distributions. The regressiveness of a simple tax or cap is overstated, and redistributive features of a revenue-neutral policy are understated.

Keywords: infrequent purchase; fuel consumption; emissions reduction; propensity score matching; surveys (search for similar items in EconPapers)
JEL-codes: C13 D04 D12 H23 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016-02
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - revised version published in: PLOS ONE, 2017, 12(10), e0185538.

Downloads: (external link)
https://docs.iza.org/dp9707.pdf (application/pdf)

Related works:
Journal Article: Something from nothing: Estimating consumption rates using propensity scores, with application to emissions reduction policies (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp9707

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().