“Forecasting theCost to Firms of Climate Policy using Prediction Markets and Lobbying
Records” AbstractForecasting the cost of proposed policies may
be difficult when prior experience is limited. This paper develops a novel
forecasting method that combines prediction market prices with stock returns to
estimate the expected cost to firms of the Waxman-Markey climate policy bill. I
find Waxman-Markey would have reduced the value of listed firms by $150 billion
with greater losses for carbon intensive sectors. A regression discontinuity
design finds sectors entitled to free allowances under the bill experienced larger
gains. Lobbying records are used to estimate a political influence function for
listed firms and to partially identify costs for unlisted firms.Link to paperAbout the Speaker:Kyle Meng is an
environmental economist whose
research examines the costs, benefits, and political economy of climate policy
with applications around the world. His research has been published in Nature and PNAS. Kyle is
currently a Postdoctoral Fellow with joint appointment at the Woodrow Wilson
School of Public and International Affairs at Princeton University and the
Environmental Defense Fund. Beginning in the fall of 2014, Kyle will be an
Assistant Professor of Environmental Science and Management and Economics at
the University of California, Santa Barbara.
