Public and private investment in renewables and broadband

Abstract

Chapter 1: Evaluating the Effects of Incentive Programs on Residential Solar Panel Adoption inMassachusetts How effective are demand-side incentive programs at encouraging households to adopt solar panels? I use data on residential solar panel installations in Massachusetts to estimate a dynamic model of solar panel adoption (or demand) that accounts for both current and future savings. The model allows me to evaluate several solar incentive programs implemented in Massachusetts in terms of their impacts on adoption rates, consumer welfare, and contribution to the reduction of CO2 emissions. In addition, I analyze each program's cost effectiveness by comparing the social benefit generated due to displaced CO2 emissions to the government's expenditure on each program. My estimates suggest that the social benefits generated are modest relative to the magnitude of public spending. Chapter 2: A Game of Quality Competition Among ISPs Understanding the effects of competition among Internet service providers on the availability and quality of broadband is important for policies aimed at decreasing the digital divide. To improve this understanding, I develop and estimate a structural model of vertical differentiation using geographical data on providers' broadband deployment and speed. The model allows me to identify the effects of competition while accounting for strategic behavior as well as to identify the fixed costs associated with entry and product quality adjustments. My results indicate that (1) firms are more likely to enter and offer high speed service in larger, denser, and wealthier markets, (2) firms tend not to vertically differentiate within markets, and (3) fixed costs of entry are large. I use these parameter estimates to conduct counterfactual simulations in which I vary the degree of competition and the size of entry costs. I find (1) holding costs constant, providers would slightly increase quality if they behaved as monopolists, and (2) holding competition constant, large reductions in entry costs are required to induce firms to substantially increase quality. Chapter 3: Does Competition from Cable Providers Spur the Deployment of Fiber? I study whether competition between broadband providers increases firms' investment in high-speed Internet service. Using survey data on Seattle broadband subscriptions and broadband deployment data from the FCC, I estimate a structural model of the Seattle broadband market to determine the extent to which competitive pressure from cable providers spurred the incumbent DSL provider to deploy fiber. The model allows me to quantify firms' fixed costs of deployment, the effect of competition by cable providers on broadband availability and consumer welfare, as well as the effects of uniform pricing across geographic markets on competition and consumer welfare. I find evidence that the incentive to deploy fiber is weaker under competition from cable providers, however, the main benefit to consumers of competition among ISPs is lower prices, while increased availability of high-speed broadband is of second-order importance.--Author's abstract