@article{90c808d74f534dcfabccc8954d92e9b8,
title = "Designing Dynamic Subsidies to Spur Adoption of New Technologies",
abstract = "We analyze the efficient subsidy for durable good technologies. We the-oretically demonstrate that a policy maker faces a tension between intertemporally price discriminating by designing a subsidy that increases over time and taking advan-tage of future technological progress by designing a subsidy that decreases over time. Using dynamic estimates of household preferences for residential solar in California, we show that the efficient subsidy increases over time. The regulator{\textquoteright}s spending quin-tuples when households anticipate future technological progress and future subsidies.",
keywords = "durable good, dynamics, expectations, foresight, price discrimination, solar, subsidy, technological change",
author = "Ashley Langer and Derek Lemoine",
note = "Funding Information: We are grateful to the University of Arizona Renewable Energy Network for supporting this work. Kyle Wilson, Max Rosenthal, and Sanguk Nam provided valuable research assistance. We thank Todd Gerarden, Gautam Gowrisankaran, Erin Mansur, David Popp, Stan Reynolds, and Mo Xiao for helpful discussions. We also thank participants at the 2016 POWER conference, the 2016 AERE summer conference, the 2017 Stanford Institute for Theoretical Economics, the 2018 National Bureau of Economic Research summer institute, North Carolina State University, the University of British Columbia, the University of North Carolina/Duke, and Yale University Forestry and Environmental Studies. Publisher Copyright: {\textcopyright} 2022 The Association of Environmental and Resource Economists. All rights reserved. Published by The University of Chicago Press for The Association of Environmental and Resource Economists.",
year = "2022",
month = nov,
doi = "10.1086/719949",
language = "English (US)",
volume = "9",
pages = "1197--1234",
journal = "Journal of the Association of Environmental and Resource Economists",
issn = "2333-5955",
publisher = "University of Chicago Press",
number = "6",
}