Research
Working Papers
"Who Receives Environmental Benefits from Driving Electric Vehicles?" (Job Market Paper)
Electrification of on-road transportation is a prominent strategy for emissions reduction. The distribution of environmental benefits from electric vehicles (EVs) largely depends on the regions to which EVs are driven. I develop a structural model of the U.S. auto market and use data from California to study household decisions with respect to both EV adoption across multiple vehicles and trip-specific vehicle selection. Combining the model-predicted probability of EV driving with simulated optimal travel routes, I construct a measure of the cumulative EV mileage at a highly granular geographic level, which captures the spatial distribution of environmental benefits. I show that higher-income communities receive more benefits. However, this disparity is less pronounced than that observed in EV adoption, suggesting a positive environmental spillover effect from EV driving. In the counterfactual policy experiments, I compare the effect of EV purchasing subsidies (both universal and targeted to low incomes) with charging station investments under various spatial deployment scenarios. The results suggest that investment in charging infrastructures generates more environmental benefits than purchase subsidy policies. Furthermore, place-based charging station policies can promote a more equitable distribution of these benefits.
"The Effects of Subway Policies on Gasoline Consumption: Subway Expansion versus Fare Changes" (with Antung A. Liu and Lei Zhang).
Investments in light rail are meant to improve accessibility and replace driving, but little research has documented the link between alternative subway policies and vehicle usage. Based on a unique data set from a major gasoline retailer in China, this paper compares the effects of expanding the subway network with revising subway prices. We find that both subway expansion and the fare change significantly impact gasoline consumption in the short run. However, the effect of subway expansion is larger and more durable. A cost-benefit calculation finds that expanding the subway is more cost-effective in reducing driving than fares changes.
"Environmental Standards and Consumers Response: Evidence from Gasoline Content Regulation in China" (with Liyang Zhou and Lei Zhang)
This paper investigates the impact of gasoline content regulation on consumer demand in China. Our empirical design takes advantage of a unique market structure and policy-induced changes in gasoline formulation. Using detailed gas station-level data, we compare the sales volume of stations that are contiguous to city borders, before and after one side imposes higher gasoline emission standards. The standard upgrade increases both the price and the environmental quality of the gasoline. We find that consumers respond positively to standard upgrades and substitute higher-emission gasoline for lower-emission ones. The Willingness to Pay (WTP) for gasoline increases by roughly 5% with the environmentally-friendly reformulation. We present evidence to suggest that the effects are driven by the preference for the higher environmental value of the new gasoline and discuss the policy implications.
"Two Hearts Tugging at One Load: Air Pollution and Online Charitable Giving" (with Ning Pan, Yinxiao Wang, and Chu A. Yu )
We investigate the relationship between sympathy and charitable giving in a natural setting with an unconventional context: exposure to air pollution that elicits sympathy and promotes donations for its victims - respiratory disease patients. Leveraging detailed visit data from a major online medical crowdfunding platform in China, we show air pollution affects charitable giving in two ways: 1) through a mood effect that reduces giving and 2) by evoking sympathy, drawing donors’ attention to environmental-related features, particularly respiratory diseases, and increasing donations. A one-standard-deviation increase in ambient PM2.5 experienced by a visitor leads to a significant 21.5% rise in donations towards respiratory disease patients compared to non-respiratory disease patients. We find that air pollution predominantly influences charitable giving through direct physical exposure to local air pollution rather than by disseminating information about pollution. The charitable contributions induced by air pollution towards respiratory diseases is quantitatively comparable to the additional medical expenses caused by air pollution, offering a silver lining amidst the challenges posed by air pollution.
"Road to A Free Labor Market: The Impact of Abolition of Job Assignment Reform in China"
How does liberalization of employment affect the equilibrium of the labor market? This paper studies a unique historical episode in China, Job Assignment Reform (JAR), which ended government-assigned employment in modern China. Using cohort-specific exposure to the reform and individual-level micro data, I estimate the impact of the reform on labor market outcomes. The results suggest that the JAR decreases the employment rate of college workers by about four percentage points but increases the wages by about 17.5 percent conditional on being employed. To quantify the mechanisms and welfare effects, I develop and calibrate a two-sector search and matching model with unobserved human capital heterogeneity. I show that the reform is beneficial to high-human-capital workers by allocating them to more productive vacancies, but harms low-human-capital workers due to the increasing unemployment risk. The reform improves the allocation of talents and increases the overall welfare and output.
"Estimating the Overall and Heterogeneous Impact of Subway Fare Surge" (with Lunyu Xie and Huning Wan)
This paper estimates the impact of a subway fare increase on ridership and explores the heterogeneous effects across demographic groups. We use a regression-discontinuity-in-time design to study a natural experiment of a subway fare surge in Beijing. We combine daily subway ridership data with household travel survey data collected right before the fare increase. We find that the fare increase leads to a short-run subway ridership reduction by 11.1 percent and households with higher incomes, greater travel demand during rush hours, and limited access to other transportation modes exhibit relatively lower price elasticity. We show that the price reform brings the Beijing subway ticket fare closer to its optimal level.
Selected Work in Progress
"The Effect of Electric Vehicle Adoption and Exposure on Air Pollution: Evidence from Commuting Routes in California" (with Prottoy Akbar)
Most studies investigate the environmental benefits of electric vehicles (EVs) using engineering models. This paper provides the first empirical evidence on the effect of electric vehicle (EV) adoption on air pollution. We construct a shift-share measurement of EV exposure for each zipcode in California using simulated commuting routes from Google Maps. This measurement combines predetermined commuting networks (shares) with EV adoption trends at the origins of routes (shifts). We provide the first causal estimation of the impact of EV usage on local pollution, demonstrating that higher exposure to EVs reduces particulate matter and NOx emissions but does not significantly affect Sulfur Dioxide, which originates from industrial sources.
"Understanding Selection and Additionality of Forest Carbon Credit Program" (with Raphael Calel, Adam Usmanov, and Jeremy Weber)
We provide a first look into one such program by studying the type of forest owners that it attracts and the implications for offset accounting. Using historical satellite and parcel ownership data, we find that forest owners who appear to have no intention of harvesting timber (Never-Cutters) are common in the eligible population of forest owners. Relative to their prevalence in the population, Never-Cutters represent a small share of owners who engaged with the program and then refused to enroll and a large share of owners who engaged and enrolled.
"Rural Labor Allocation, Risk Insurance, and Temporary Migration: A Quantitative Analysis" (with Li Zhang).
This paper hightlights the importance of diversified labor income sources and labor supply flexibility for the rural labor market. Using unique and rich longitudinal data on rural households in China, we show that 60.9% of risk insurance occurs during the transmission of agriculture income shock to total labor income, while the transmission of income shock to consumption accounts for 39.1%. This confirms that rural households respond to agricultural shocks by adjusting local labor allocation. Based on the empirical findings, we structurally estimate a dynamic model that features both ex-ante migration decisions and ex-post local labor allocation, allowing us to capture the mechanism of rural-urban migrations as a risky investment and off-farm labor as risk insurance. We use the model to study the welfare effects of reducing moving barriers and relaxing borrowing constraints.
Selected Publications
*My pre- and early- doctoral works have been published in top Chinese Economics journals and get over 200 citations.
"Political Incentive, Competition Driven, and Capacity Expansion: Evidence from the Electricity Sector Reform in China" (with Lunyu Xie and Jing Jin), Journal of World Economy (世界经济), 2021.
"Should District Heating Cross the Huai River?---Estimation Based on Chinese Residential Energy Consumption Survey" (with Jing Jin and Xinye Zheng), China Economic Quarterly (经济学季刊), 2020. [English version]
"Coordination between Government Departments and the Allocation of Public Resources: Theory and Empirical Evidence" (with Xinye Zheng and Li Zhang), Economic Research Journal (经济研究), leading article, 2019.
"National Industrial Policy, Local Government Behavior and Effective Tax Rate: Theoretical Analysis and Empirical Evidence" (with Jie Guo and Bohan Zhen), Journal of Financial Research (金融研究), 2019.
"Is Quasi-Fiscal Policy Useful: An Evaluation of the Effect of Central Investment on Local Investment" (with Li Zhang and Xinye Zheng), Management World (管理世界), 2018.
"Who Receives Environmental Benefits from Driving Electric Vehicles?" (Job Market Paper)
Electrification of on-road transportation is a prominent strategy for emissions reduction. The distribution of environmental benefits from electric vehicles (EVs) largely depends on the regions to which EVs are driven. I develop a structural model of the U.S. auto market and use data from California to study household decisions with respect to both EV adoption across multiple vehicles and trip-specific vehicle selection. Combining the model-predicted probability of EV driving with simulated optimal travel routes, I construct a measure of the cumulative EV mileage at a highly granular geographic level, which captures the spatial distribution of environmental benefits. I show that higher-income communities receive more benefits. However, this disparity is less pronounced than that observed in EV adoption, suggesting a positive environmental spillover effect from EV driving. In the counterfactual policy experiments, I compare the effect of EV purchasing subsidies (both universal and targeted to low incomes) with charging station investments under various spatial deployment scenarios. The results suggest that investment in charging infrastructures generates more environmental benefits than purchase subsidy policies. Furthermore, place-based charging station policies can promote a more equitable distribution of these benefits.
"The Effects of Subway Policies on Gasoline Consumption: Subway Expansion versus Fare Changes" (with Antung A. Liu and Lei Zhang).
Investments in light rail are meant to improve accessibility and replace driving, but little research has documented the link between alternative subway policies and vehicle usage. Based on a unique data set from a major gasoline retailer in China, this paper compares the effects of expanding the subway network with revising subway prices. We find that both subway expansion and the fare change significantly impact gasoline consumption in the short run. However, the effect of subway expansion is larger and more durable. A cost-benefit calculation finds that expanding the subway is more cost-effective in reducing driving than fares changes.
"Environmental Standards and Consumers Response: Evidence from Gasoline Content Regulation in China" (with Liyang Zhou and Lei Zhang)
This paper investigates the impact of gasoline content regulation on consumer demand in China. Our empirical design takes advantage of a unique market structure and policy-induced changes in gasoline formulation. Using detailed gas station-level data, we compare the sales volume of stations that are contiguous to city borders, before and after one side imposes higher gasoline emission standards. The standard upgrade increases both the price and the environmental quality of the gasoline. We find that consumers respond positively to standard upgrades and substitute higher-emission gasoline for lower-emission ones. The Willingness to Pay (WTP) for gasoline increases by roughly 5% with the environmentally-friendly reformulation. We present evidence to suggest that the effects are driven by the preference for the higher environmental value of the new gasoline and discuss the policy implications.
"Two Hearts Tugging at One Load: Air Pollution and Online Charitable Giving" (with Ning Pan, Yinxiao Wang, and Chu A. Yu )
We investigate the relationship between sympathy and charitable giving in a natural setting with an unconventional context: exposure to air pollution that elicits sympathy and promotes donations for its victims - respiratory disease patients. Leveraging detailed visit data from a major online medical crowdfunding platform in China, we show air pollution affects charitable giving in two ways: 1) through a mood effect that reduces giving and 2) by evoking sympathy, drawing donors’ attention to environmental-related features, particularly respiratory diseases, and increasing donations. A one-standard-deviation increase in ambient PM2.5 experienced by a visitor leads to a significant 21.5% rise in donations towards respiratory disease patients compared to non-respiratory disease patients. We find that air pollution predominantly influences charitable giving through direct physical exposure to local air pollution rather than by disseminating information about pollution. The charitable contributions induced by air pollution towards respiratory diseases is quantitatively comparable to the additional medical expenses caused by air pollution, offering a silver lining amidst the challenges posed by air pollution.
"Road to A Free Labor Market: The Impact of Abolition of Job Assignment Reform in China"
How does liberalization of employment affect the equilibrium of the labor market? This paper studies a unique historical episode in China, Job Assignment Reform (JAR), which ended government-assigned employment in modern China. Using cohort-specific exposure to the reform and individual-level micro data, I estimate the impact of the reform on labor market outcomes. The results suggest that the JAR decreases the employment rate of college workers by about four percentage points but increases the wages by about 17.5 percent conditional on being employed. To quantify the mechanisms and welfare effects, I develop and calibrate a two-sector search and matching model with unobserved human capital heterogeneity. I show that the reform is beneficial to high-human-capital workers by allocating them to more productive vacancies, but harms low-human-capital workers due to the increasing unemployment risk. The reform improves the allocation of talents and increases the overall welfare and output.
"Estimating the Overall and Heterogeneous Impact of Subway Fare Surge" (with Lunyu Xie and Huning Wan)
This paper estimates the impact of a subway fare increase on ridership and explores the heterogeneous effects across demographic groups. We use a regression-discontinuity-in-time design to study a natural experiment of a subway fare surge in Beijing. We combine daily subway ridership data with household travel survey data collected right before the fare increase. We find that the fare increase leads to a short-run subway ridership reduction by 11.1 percent and households with higher incomes, greater travel demand during rush hours, and limited access to other transportation modes exhibit relatively lower price elasticity. We show that the price reform brings the Beijing subway ticket fare closer to its optimal level.
Selected Work in Progress
"The Effect of Electric Vehicle Adoption and Exposure on Air Pollution: Evidence from Commuting Routes in California" (with Prottoy Akbar)
Most studies investigate the environmental benefits of electric vehicles (EVs) using engineering models. This paper provides the first empirical evidence on the effect of electric vehicle (EV) adoption on air pollution. We construct a shift-share measurement of EV exposure for each zipcode in California using simulated commuting routes from Google Maps. This measurement combines predetermined commuting networks (shares) with EV adoption trends at the origins of routes (shifts). We provide the first causal estimation of the impact of EV usage on local pollution, demonstrating that higher exposure to EVs reduces particulate matter and NOx emissions but does not significantly affect Sulfur Dioxide, which originates from industrial sources.
"Understanding Selection and Additionality of Forest Carbon Credit Program" (with Raphael Calel, Adam Usmanov, and Jeremy Weber)
We provide a first look into one such program by studying the type of forest owners that it attracts and the implications for offset accounting. Using historical satellite and parcel ownership data, we find that forest owners who appear to have no intention of harvesting timber (Never-Cutters) are common in the eligible population of forest owners. Relative to their prevalence in the population, Never-Cutters represent a small share of owners who engaged with the program and then refused to enroll and a large share of owners who engaged and enrolled.
"Rural Labor Allocation, Risk Insurance, and Temporary Migration: A Quantitative Analysis" (with Li Zhang).
This paper hightlights the importance of diversified labor income sources and labor supply flexibility for the rural labor market. Using unique and rich longitudinal data on rural households in China, we show that 60.9% of risk insurance occurs during the transmission of agriculture income shock to total labor income, while the transmission of income shock to consumption accounts for 39.1%. This confirms that rural households respond to agricultural shocks by adjusting local labor allocation. Based on the empirical findings, we structurally estimate a dynamic model that features both ex-ante migration decisions and ex-post local labor allocation, allowing us to capture the mechanism of rural-urban migrations as a risky investment and off-farm labor as risk insurance. We use the model to study the welfare effects of reducing moving barriers and relaxing borrowing constraints.
Selected Publications
*My pre- and early- doctoral works have been published in top Chinese Economics journals and get over 200 citations.
"Political Incentive, Competition Driven, and Capacity Expansion: Evidence from the Electricity Sector Reform in China" (with Lunyu Xie and Jing Jin), Journal of World Economy (世界经济), 2021.
"Should District Heating Cross the Huai River?---Estimation Based on Chinese Residential Energy Consumption Survey" (with Jing Jin and Xinye Zheng), China Economic Quarterly (经济学季刊), 2020. [English version]
"Coordination between Government Departments and the Allocation of Public Resources: Theory and Empirical Evidence" (with Xinye Zheng and Li Zhang), Economic Research Journal (经济研究), leading article, 2019.
"National Industrial Policy, Local Government Behavior and Effective Tax Rate: Theoretical Analysis and Empirical Evidence" (with Jie Guo and Bohan Zhen), Journal of Financial Research (金融研究), 2019.
"Is Quasi-Fiscal Policy Useful: An Evaluation of the Effect of Central Investment on Local Investment" (with Li Zhang and Xinye Zheng), Management World (管理世界), 2018.