Essays in Energy and Health

Abstract

In my dissertation, I answer policy relevant questions to help make a real world impact. These research questions are in the areas of energy economics, development economics, and health economics. I use very large datasets and microeconomic tools, such as economic models, and statistical analysis, to answer questions in the contexts of emerging economies like India and developed economies like the United States. The first three papers in my dissertation document the challenges before India as it transitions towards more renewable sources of energy and projected to be a surplus producer of power. Chapter one of my dissertation lays out the context for electricity distribution networks in India. Chapter two analyses the challenge of reliable power for electricity distribution networks in India. Despite investments in generation capacity and projected surplus power, residents continue to languish in the dark and face frequent interruptions. Unreliable power supply implies a loss of productivity and lower quality of life for residents. I quantify the extent and magnitude of how unforeseen breakdowns of thermal generation result in unexpected losses in power supply to consumers. I find that unforeseen thermal generation shutdowns result in loss in power supply to consumers. These unforeseen breakdowns are as a result of equipment failures, fuel shortages, auxiliary power failures etc at the generating units. I find that in 2009 a loss in non-intermittent generation implied a 5.86% loss to the consumer. By 2013, the loss to the consumer was 1.15% and by 2014 a loss in generation did not imply any losses to the consumer. Over the years, India has significantly added generation capacity. I find that this standby capacity helps alleviate impact of short-run shocks by increasing reserve margins, the unused generation capacity during peak hours, available to the distribution utility. In chapter three, I study how unreliability is compounded by the organization of energy systems that determines the allocation of the unforeseen losses across different types of consumers. In developed economies like the United States, electricity distribution is deregulated and utilities are required to credibly commit to reliable power. This helps utilities keep political interference at a minimum and implies that the allocation of scarce power across consumer types is economically efficient. In the case of developing countries, considerations of development and social justice motivate the involvement of governments in electricity distribution. Along with long-run investments, this implies the role of governments in the day to day operations of the utility. In order to balance its books, the utility is thus incentivized to supply power in an economically inefficient manner to maximize subsidies or handouts from the government. Using unreliability from unforeseen shutdowns of thermal power plants, I study their distribution across consumers. I find that in the event of such unforeseen failures in generation, urban consumers face 5% of the overall generation failures. I find non-statistically significant losses for agricultural and non-agricultural consumer groups. I argue that this revealed distribution deviates from the economic efficiency principle as agreed to by the utility in loadshedding protocols. I also argue that unforeseen failures of thermal generation are events when these protocols do not apply. In conclusion, my dissertation finds implications for the future of grids in India with greater intermittent renewables. Given that there exists unreliability from non-intermittent thermal sources, the addition of intermittent renewables on the grid is likely to compound the problem. Moreover, given the distribution of unreliability is unequal, an addition of intermittent source is likely to compound this inequality. Chapter 4 of my dissertation studies physician decision-making in the United States for the market for cardiac stents. We study the extent to which physician’s experience leads to greater productivity and better patients’ outcomes. We leverage unusually detailed data on physician outcomes during and after cardiac stenting procedure. We find that the overall experience with stents significantly boosts physician productivity as recorded in shorter duration of procedures by 11.12%. It boosts short-term and long-term outcomes as recorded by 0.20% lower short-run and 0.25% lower long-run readmission rates. Thus, we find suggestive evidence of physician learning by doing and the positive impact of such learning by doing on her clinical outcomes.