Xueying Lu

Ph.D. Candidate – Department of Economics

Phone: (857) 350-2863

Email: xulu@ucsd.edu

Research Statement

Research Statement  (PDF)

Working Papers

"Housing Markets and Automobile Policy"  (PDF) (Job Market Paper)

To alleviate air pollution and traffic congestion, cities around the world are beginning to implement automobile policies to restrict car use or car ownership. However, there is little empirical evidence on possible indirect impacts of these policies in connected markets. This paper investigates the distributional impacts of a unique car purchase lottery in Beijing on the housing market. I use a difference-in-differences approach to compare heterogeneous neighborhoods before and after implementation of the policy. At an aggregate scale, housing prices within Beijng's fourth ring road increase by 1 to 2% while those outside the fifth ring road decrease by 5%. This is equivalent to transferring about 115,000 RMB ($17,000) from each apartment owner outside the fifth ring to those within the fourth ring. The disaggregate effects are even more pronounced: housing prices increase at locations close to common destinations (employment centers: 5%; primary schools: 3%) and alternative transportation (subway: 3%; buses: 4%). These changes reflect capitalization of the automobile policy and imply a large, and likely unexpected, redistribution across homeowners. The results are relevant to policy, both in the context of unintended consequences and for efforts to develop offsetting measures.

"Transmission Constraints, Intermittent Renewables and Welfare"  (PDF) (with Jacob LaRiviere)

We use the roll-out of a large transmission expansion in Texas' electricity market to measure the market and non-market impacts of the transmission expansion on benefits of increased renewable capacity. We find large market benefits leading to a payback period of roughly 14 years. However, total welfare improvements from reduced congestion depend on how global non-market externalities are internalized by regional policy makers: accounting for non-market externalities reduces the payback period of this project from 14 to less than 9 years. We discuss the finding's implications for the welfare of regional decisions to build transmission capacity for the U.S. wholesale electricity market in response to federal renewable subsidies.

Research in Progress

"Are Electric Cars and Solar Panels Complements? Positive Externalities from Green Policies"

Both electric cars and residential solar are environmentally friendly durable goods and both are often subsidized. The relationship between the two in demand will affect the efficiency of a range of green policies. This paper explores the complementarity of the two goods, taking an instrumental variables approach to separate correlation in preferences from underlying complementarity. Utilizing the availability of carpool lanes as an instrument, I find that every 16 electric car sales lead to one added solar installation. Using Global Horizontal Irradiance as an instrument, I find that each solar adoption leads to 6 additional electric car sales. The complementarity implies substantial spillovers from policy affecting either choice, changing the cost-benefit calculus for a range of green policies.

"Extreme Temperatures and Risk Attitude: Evidence from Powerball and Cigarettes Sales"

Extreme temperature has been shown to affect many aspects of physical and mental health, but little has been done to examine individual attitudes toward risk. This paper investigates the impact of extreme temperature on risk by leveraging daily temperature variation with sales of two "risky" goods---Powerball tickets and cigarettes. Temperature and shopping trips are connected through avoidance behavior, leading me to jointly consider a range of other goods, including milk and toothpaste, in the analysis. Preliminary results show that sales of risky goods increase substantially with extreme heat, demonstrating a novel dimension in the connection between temperature extremes and human behavior.

Publications

"Effectiveness of Government Enforcement in Driving Restrictions: A Case in Beijing, China"  (PDF) Environmental Economics and Policy Studies 18.1 (2016): 63-92. [Published Version]

During the Olympic Games in 2008, a driving restriction based on vehicle license plate numbers was implemented in Beijing to mitigate air pollution and traffic congestion. Following the Games, the restriction was modified several times. This paper investigates the effects of two policy changes: a weakening policy change due to a shorter restricted time period, and a strengthening policy change due to a higher penalty for violators and the complementary car purchasing restriction. By employing a regression discontinuity design in a Tobit model, I find that the weakening policy change led to more pollution and the strengthening policy change improved air quality in restricted areas. Several robustness checks confirm the results. I also provide suggestive evidence that driving restrictions increased the use of public transportation and alleviated traffic congestion.