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The U.S. Investment Tax Credit for Solar Energy: Alternatives to the Anticipated 2017 Step-Down

July 6, 2015 Comments off

The U.S. Investment Tax Credit for Solar Energy: Alternatives to the Anticipated 2017 Step-Down
Source: Stanford Graduate School of Business

The federal Investment Tax Credit (ITC) for solar installations is scheduled to step-down from 30% to 10% at the beginning of 2017 for corporate investors. This raises the question whether solar PV will be cost competitive post 2016 in the U.S. We examine the economics of solar PV for a sample of U.S. states and industry segments. Our model calculations indicate that for almost all of these settings the anticipated ITC step-down would render solar PV uncompetitive by early 2017, raising the specter of a ‘cliff’ for the solar industry. We identify and evaluate an alternative phase-down scenario that would reduce the ITC gradually and eliminate it completely by 2024. Provided the solar industry can maintain the pace of cost reductions demonstrated in past years, our projections indicated that solar PV would remain broadly competitive, even as federal tax support would be gradually diminished, and ultimately eliminated, under the alternative phase-down-scenario.

Ideological Proximity and Support for The Supreme Court

June 21, 2015 Comments off

Ideological Proximity and Support for The Supreme Court
Source: Stanford Graduate School of Business

Although the Supreme Court is a countermajoritarian institution by design, many scholars have contended that without concrete powers, the Court relies on public support for legitimacy. Accordingly, it is important to understand the relationship between people’s ideological proximity to the Court and their support for it. Existing empirical research suggests a correspondence between public opinion and the Court’s positions, but these studies do not directly compare masses and elites in a common space. To address these issues, we conducted an original survey asking respondents about their positions on ten recently decided Supreme Court cases. This allows us to estimate the positions of citizens and justices on the same ideological scale. Further, while some existing theories of perceptions of judicial legitimacy suggest similar relationships between ideological distance and various types of support for the Court, we propose a theory of heterogeneous responsiveness which posits that citizens’ ideological distance from the Court should be negatively related to their approval of and trust in the institution, but positively related to their support for its countermajoritarian function. Our empirical approach finds support for the theory.

Effects of Targeted Promotions: Evidence from Field Experiments

May 12, 2015 Comments off

Effects of Targeted Promotions: Evidence from Field Experiments
Source: Stanford Graduate School of Business

The prevalence and widespread usage of email has given businesses a direct and cost effective way of providing consumers with targeted promotional offers. While targeted promotions are expected to increase the demand for the promoted products, are these promotions effective in increasing revenues? Do they have effects beyond acting as price reductions? We study these questions using individual-level data from 70 randomized experiments run by a large online ticket resale platform. We measure the impact of emailed promotions by comparing purchases by individuals who received the experimental promotions with purchases by those who did not receive the offers because of the experimental randomization. We find that the offers cause the average expenditure to increase by $3.03 (a 37.2% increase) during the promotion window. However, ninety percent of these gains are not through redemption of the offers. Interestingly, the promotion causes carryover to the week after the promotion expires; we find that spending increases by $1.55 in the week after the offer expires. Additionally, we find evidence for cross category spillovers to non-promoted products – offers not applicable to a ticket genre cause an increase in spending in that genre. We conclude that emailed promotions can serve as a form of “advertising” for the firm’s products.

CREDO Study Finds Urban Charter Schools Outperform Traditional School Peers

April 1, 2015 Comments off

CREDO Study Finds Urban Charter Schools Outperform Traditional School Peers
Source: Center for Research on Education Outcomes, Stanford University

Stanford University’s Center for Research on Education Outcomes (CREDO), the nation’s foremost independent analyst of charter school effectiveness, released today a comprehensive Urban Charter Schools Report and 22 state-specific reports that combine to offer policymakers unprecedented insight into the effectiveness of charter schools.

Across 41 regions, urban charter schools on average achieve significantly greater student success in both math and reading, which amounts to 40 additional days of learning growth in math and 28 days of additional growth in reading. Compared to the national profile of charter school performance, urban charters produce more positive results. CREDO’s National Charter School Study results in 2013 found that charter schools provided seven additional days of learning per year in reading and no significant difference in math.

The Ideal Proxy Statement

March 10, 2015 Comments off

The Ideal Proxy Statement
Source: Stanford Graduate School of Business

Institutional investors are highly dissatisfied with the quality of information that they receive about corporate governance policies and practices in the annual proxy. Across the board, they want proxies to be shorter, more concise, more candid, and less legal. The largest complaint involves executive compensation and the inability of investors to determine whether senior management is paid appropriately.

Based on recent survey data from major institutional investors, we describe the information that shareholders would like to see in the “ideal” proxy statement.

We ask:

  • What changes can companies make to proxies that contain the information that investors want in a format that is easy to read and navigate?
  • Would shareholder understanding of corporate governance practices improve if companies provided clearer and more succinct data?
  • How might the debate about executive compensation change?

Superbowl Ads

March 6, 2015 Comments off

Superbowl Ads
Source: Stanford Graduate School of Business

We explore the effects of television advertising in the setting of the NFL’s Super Bowl telecast. The Super Bowl is the largest advertising event of the year and is well suited for measurement. The event has the potential to create significant increases in “brand capital” because ratings average over 40 percent of households and ads are a focal point of the broadcast. Furthermore, variation in exposures is exogenous because a brand cannot choose how many impressions it receives in each market. Viewership is determined based on local preferences for watching the two competing teams. With this significant and exogenous variation in Super Bowl advertising exposures we test whether advertisers’ sales are affected accordingly. We run our analysis using Nielsen ratings and store level sales data in the soda and beer categories. We find that Super Bowl ads can generate significant increases in revenue and volume per household. However, when two major soda brands both advertise, they receive no profit gain to offset their advertising investments. Exploring the mechanism behind the ad effects, we find that Super Bowl ads build an association between the brand and viewership of sports more broadly. The competitive effects suggest that two competing brands cannot however capture the same association. In beer, Budweiser has purchased exclusive advertising rights in the Super Bowl for more than 20 years and appears to be receiving long run returns from their ownership of a sports association.

Publication Bias in the Social Sciences: Unlocking the File Drawer

November 21, 2014 Comments off

Publication Bias in the Social Sciences: Unlocking the File Drawer (PDF)
Source: Stanford University

We study publication bias in the social sciences by analyzing a known population of conducted studies–221 in total–where there is a full accounting of what is published and unpublished. We leverage TESS, an NSF-sponsored program where researchers propose survey-based experiments to be run on representative samples of American adults. Because TESS proposals undergo rigorous peer review, the studies in the sample all exceed a substantial quality threshold. Strong results are 40 percentage points more likely to be published than null results, and 60 percentage points more likely to be written up. We provide not only direct evidence of publication bias, but also identify the stage of research production at which publication bias occurs—authors do not write up and submit null findings.

See: Why No News Is Still Important News in Research (Stanford Graduate School of Business)

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