About Me
Welcome! I am an Associate Professor of Economics and Environmental Studies at Oberlin College. My research focuses on issues in energy and environmental economics, as well as industrial organization. I received my Ph.D. in Economics from the University of Michigan and my B.A. in Mathematics and Economics from Vassar College.
Peer-Reviewed Publications
- "Backup Power: Public Implications of Private Substitutes for Electric Grid Reliability"
(with Sarah Johnston and Ross Milton, Accepted at the Journal of the Association of Environmental and Resource Economists)
[ | Working Paper ]Private substitutes for electric grid reliability are common. We study their adoption and distributional implications. We first show that U.S. households buy substitutes in response to a perceived decrease in grid reliability and that higher-income households are more likely to adopt them. We then develop a theoretical model of public provision of grid reliability in the presence of private substitutes that is consistent with these facts. The existence of substitutes increases aggregate welfare and reduces the efficient level of reliability spending. Using a calibrated version of the model, we find that, even though only a few households adopt batteries, most non-adopting households benefit from their availability. Battery adoption reduces utilities’ reliability spending, resulting in lower electricity bills for all customers. Most non-adopting households value these bill savings more than the reduced grid reliability.
- Brehm, Margaret, and Paul Brehm. "Drill, Baby, Drill: Resource Shocks and Fertility, Evidence from Indonesia." Labour Economics 76 (2022): 102178.
[ ]We find that positive natural resource shocks lead to increased fertility in Indonesia by exploiting temporal variation in world oil prices and cross-sectional variation in oil endowments across regencies. Results are driven by women of all ages, by both first and higher order births, and we find no evidence of changes in birth spacing. Altogether, this indicates an increase in completed fertility. We present empirical evidence and cite prior literature demonstrating corresponding improvements in households' economic outcomes, consistent with positive income effects on fertility in a developing economy.
- Brehm, Margaret, Paul Brehm, and Martin Saavedra. "The Ohio Vaccine Lottery and Starting Vaccination Rates." American Journal of Health Economics 8(3) (2022): 387-411.
[ | Science Magazine Coverage ]We find that Ohio’s “Vax-a-Million” lottery increased first dose Covid-19 vaccinations by between 50,000 and 100,000, with most of the additional doses occurring during the first two weeks of the six-week lottery. We use county-level data and two empirical approaches to provide causal estimates of the lottery in Ohio. First, a difference-in-differences design compares vaccination rates in border counties in Ohio and Indiana before and after the announcement. Second, we use a pooled synthetic control method to construct a counterfactual for each of Ohio’s counties using control counties in Indiana, Michigan, and Pennsylvania. The synthetic control analysis reveals larger increases in vaccination rates in more populous counties. Our estimates imply that Ohio paid about $75 per additional starting dose during this period.
- Brehm, Paul, and Eric Lewis. "Information Asymmetry, Trade, and Drilling: Evidence from an Oil Lease Lottery." The RAND Journal of Economics 52 (2021): 496-514.
[ | Online Appendix ]We exploit a government oil lease lottery to examine how well markets correct for initial misallocation. We find that in most cases, leases won by individuals have similar drilling outcomes to those won by oil and gas firms, suggesting that secondary markets efficiently correct for misallocation. However, a subset of leases is close to existing oil production where the nearby oil producing firm likely had inside information about expected productivity. We find that these leases are 50% less likely to be drilled when they are won by firms. We develop a model of information asymmetry that explains these results.
- Brehm, Paul and Yiyuan Zhang. "The Efficiency and Environmental Impacts of Market Organization: Evidence from the Texas Electricity Market." Energy Economics 101 (2021): 105359.
[ | Pre-Publication Version ]This paper examines the effect of market organization on efficiency and emissions in wholesale electricity markets. Taking advantage of Texas' transition from a decentralized bilateral trading market to a centralized auction market, we find that information aggregation has a positive effect on market efficiency that dominates any change in market power incentives. Specifically, we show that in the nine months following the transition, high-cost generators are displaced by low-cost generators in production, leading to annual cost savings of ~$59 million relative to the counterfactual. Although the centralized market reduces generation costs, it also has an unintended effect on pollution emissions. For moderate marginal damage estimates, we find the increase in external costs of emissions completely offsets the productive efficiency gain.
- Brehm, Paul. "Natural gas prices, electric generation investment, and greenhouse gas emissions." Resource and Energy Economics 58 (2019): 101-116.
[ | Pre-Publication Version ]Between 2007 and 2013 the natural gas price dramatically declined, in large part due to hydraulic fracturing. These lower natural gas prices induced switching from coal generation to natural gas generation. I find that switching caused 2013 carbon emissions to fall by 14,700 tons/hour. Lower gas prices also incentivized new investment in natural gas capacity. This less carbon-intensive capital stock led to an additional decrease of 2,100 tons/hour in 2013. Using three approaches, I estimate that 65-85% of new capacity was constructed because of lower gas prices. A social cost of carbon of $35/ton values the estimated total decrease in 2013 emissions at roughly $5.1 billion.
Other Publications
- Frantz, Cindy, Paul Brehm, Stephen Gray, Johanna Jauernig, Rebecca Jordan, John Petersen, and Rumi Shammin (2022). "Promoting viewpoint diversity and perspective taking through fuzzy cognitive mapping." Final Report for the Heterodox Academy’s Increasing Open Inquiry on College Campuses Research Grant.
Working Papers
- "Vaccines and Verdicts: How Smallpox Court Decisions Affect Anti-Vaccine Discourse and Mortality"
[ | Working Paper ]
(with Martin Saavedra, Revisions Requested at The Economic Journal)We estimate the effect of compulsory vaccination court decisions on anti-vaccine discourse and mortality. We measure anti-vaccine discourse using language in American newspapers. Using human-classified training data and machine learning techniques, we predict anti-vaccine discourse for nearly 48,000 newspaper pages. Staggered difference-in-differences estimates show that anti-vaccine discourse increased for a period of two years after pro-vaccine state-level Supreme Court decisions before returning to baseline. Regression-discontinuity-in-time estimates yield similar findings following the Jacobson v. Massachusetts US Supreme Court decision. While compulsory vaccinations increase anti-vaccine discourse, mandates remain effective: we estimate that compulsory vaccination reduces smallpox mortality rates by roughly 40 percent.
- "Airline Competition, Oil Price Pass-Through, and Carbon Taxes"
[ ]
(with Anirudh Jayanti and Andrew Usher)We study the pass-through of fuel costs to airline ticket prices. We find evidence of high pass-through rates that increase with competition, as well as significant heterogeneity across different products. Our findings are consistent with a model of price discrimination. Estimation of the parameters of this model allows us to isolate the effect of price discrimination on pass-through and characterize how this effect changes with competition. Because high oil prices function similarly to a carbon tax, we use our model to explore the implications of a carbon tax on the airline industry.
Works in Progress
- "Dutch Disease and Decentralization"
(with Maggie Brehm, Alecia Cassidy, and Traviss Cassidy)- "Does Promoting the Underdog Increase Competition? Evidence from Oil Leases"
(with Eric Lewis)- "Integrating Perspective-Taking and Systems Thinking for Complex Problem-Solving"
(with Cindy Frantz, Rumi Shammin, John Petersen, Johanna Jauernig, Steven Gray, and Rebecca Jordan)- "Promoting Viewpoint Diversity and Perspective-Taking through Fuzzy Cognitive Mapping"
(with Cindy Frantz, Rumi Shammin, John Petersen, Johanna Jauernig, Steven Gray, and Rebecca Jordan)
Teaching
Oberlin College:University of Michigan:
- Principles of Economics [101] (Fall 2017, Spring 2018, Fall 2018, Spring 2019, Spring 2020, Spring 2022)
- Environmental Economics [231] (Fall 2017, Fall 2018, Fall 2019, Fall 2021, Fall 2022)
- Energy Economics [332] (Spring 2018, Spring 2019, Fall 2019, Spring 2022)
- Seminar in Energy and Environmental Economics [432] (Spring 2020, Fall 2021, Spring 2023)
- Economics Honors Program Coordinator [491] (Fall 2022-Spring 2023)
- Graduate Student Instructor, Environmental and Resource Economics
(Fall 2016)- Graduate Student Instructor Mentor, Economics Department
(Fall 2014, Winter 2015, Fall 2015, Winter 2016)- Head Graduate Student Instructor,Principles of Macroeconomics
(Fall 2013, Winter 2014, Fall 2014)- Graduate Student Instructor, Principles of Macroeconomics
(Fall 2012, Winter 2013)
Honors and Awards
National Science Foundation Grant for Collaborative Research on “Integrating Perspective-taking and Systems Thinking for Complex Problem-Solving” (2022, $593,133, Co-PI) Heterodox Academy Grant for “Promoting viewpoint diversity and perspective taking through fuzzy cognitive mapping” (2021, $30,000, Co-PI) Donald R. Longman Faculty Fellowship (2020-2021) Rackham One-Term Dissertation Fellowship (Winter 2017) MITRE Graduate Research Award for "Airline Competition, Oil Price Pass-Through, and Carbon Taxes" (2016, $5,000) Outstanding Graduate Student Instructor Award (University-wide, 2015) Rackham Graduate Student Research Grant for "To Trade or not to Trade: Oil Leases, Information Asymmetry, and Coase" (2015, $3,000) Letters of Commendation for Excellent Teaching (Winter 2013, Fall 2013, Winter 2014)
- Summer Research Apprenticeship, Department of Economics, University of Michigan
(2012, 2013)- Verne G. Istock Scholar Award, University of Michigan (2011-2012)
- Emilie Louise Wells Fellowship, Vassar College (2011-2012)
- Phi Beta Kappa, Vassar College (2008)
Professional Experience
- Research Analyst, The Brattle Group (2008-2011)
