Richard P. Langford
Home Address:
426 Prospect Street #5
New Haven, CT 06511
Office Address:
Department of Economics
Yale University
New Haven, CT 06520-8268
Telephone: (845) 216-7511
E-mail: richard.langford@yale.edu
Website: https://sites.google.com/site/rilangford/
Citizenship: U.S.
Fields of Concentration:
Industrial Organization
Econometrics
Desired Teaching:
Industrial Organization
Econometrics
Microeconomics
Comprehensive Examinations Completed:
2012 (Oral): Econometrics
2011 (Oral): Industrial Organization
Dissertation Title: Household Responses to Gasoline Price Changes in the U.S. Automobile
Market
Committee:
Professor Steve Berry
Professor Kenneth Gillingham
Professor Phil Haile
Expected Completion Date: May 2015
Degrees:
Ph.D., Economics, Yale University, 2015 (expected)
M.Phil., Economics, Yale University, 2012
M.A., Economics, Yale University, 2011
B.A., Economics and Mathematics, Vassar College, 2009
Fellowships, Honors and Awards:
Yale University Doctoral Fellowship, 2009-present
Vassar Emilie Louise Wells Fellowship, 2009-2010
Phi Beta Kappa, 2009
Omicron Delta Epsilon, 2009
General, Economics, and Mathematics Honors, Vassar College, 2009
Teaching Experience:
Yale University, Teaching Fellow
ECON 125, Microeconomic Theory, Fall 2014
ECON 136, Econometrics, Spring 2013
ECON 135, Intro Probability and Statistics, Fall 2012
ECON 121, Intermediate Microeconomics, Spring 2012
ECON 131, Econometrics and Data Analysis I, Fall 2011
Vassar College, Supplemental Instructor
MATH 125/126, Topics in Single Variable Calculus, 2008-2009
MATH 121/122, Single Variable Calculus, 2007-2008
Research and Work Experience:
Associate Intern, Analysis Group – Boston, 2011
Research Intern, Board of Governors of the Federal Reserve System, 2010
Ford Scholar, Vassar College, 2008
URSI Fellow, Vassar College, 2007
Working Papers:
“Estimating the Full Range of Gasoline Price Elasticities,” (November 2013)
Works In Progress:
“Examining the Impact of Hybrids on U.S. Consumers” with Ken Gillingham, (2014).
Languages:
English (native)
References:
Steven T. Berry
Yale University
Department of Economics
New Haven, CT 06520
PO Box
steven.berry@yale.edu
Kenneth Gillingham
Yale University
Department of Economics
New Haven, CT 06520
PO Box
kenneth.gillingham@yale.edu
Phil Haile
Yale University
Department of Economics
New Haven, CT 06520
PO Box
philip.haile@yale.edu
Dissertation Abstract: Household Responses to Gasoline Price Changes in the U.S. Market
I examine household responses to changes in gasoline prices in the United States during
the last ten to fifteen years. First, I extend the standard vehicle choice model to account for the
benefits a household can obtain from holding multiple vehicles of different types and for the
tendency of a household to hold onto the same vehicle for several years. I use this vehicle choice
model together with a vehicle usage model to calculate the elasticities of demand for U.S.
gasoline. Along with estimates of the social cost of gasoline use provided by the National
Research Council, these elasticities allow me to calculate the social benefit a gasoline tax would
provide in terms of reduced carbon emissions and national oil dependency. I simultaneously
calculate immediate, short-run benefits; medium-run benefits ranging from two to ten years after
the change in gas prices; and long-run benefits after consumers have fully adapted vehicle
holdings and usage to the price change. I estimate the extent to which these benefits would
change if manufacturers chose to use technological advancements in engine efficiency to
increase MPG ratings rather than horsepower. Finally, I look at the introduction of hybrids to the
U.S. market, analyzing their reception and impact since 2004 and estimating the welfare they
have created for households.
Chapter 1: Gasoline Price Elasticities and Social Benefits from Gasoline Taxes: Estimating
Household Vehicle Decisions over Time [Job Market Paper]
I develop a two-part, vehicle choice and vehicle usage model to estimate the elasticities
of demand for U.S. gasoline across time and, consequently, the social benefit a gasoline tax
would provide in terms of reduced carbon emissions and national oil dependency. The model is
the first to estimate a wide range of gasoline price elasticities under the same model, allowing me
to estimate immediate, short-run benefits to a gasoline tax; medium-run benefits ranging from
two to ten years after the tax is implemented; and long-run benefits when consumers have fully
adjusted their vehicle holdings and usage to the tax.
I include two key innovations in the vehicle choice model. First, I account for vehicle
complementarity by having consumers choose vehicle bundles rather than individual vehicles in
a two-level nested logit structure for consumer utility. Consumers first choose the number and
types of vehicles and then choose specific vehicles which fit into their “type bundle.” At the top
level, bundle-specific fixed effects capture both vehicle complementarity and the diminished
marginal utility from a second vehicle, and bundle-level characteristics are interacted with
household characteristics. At the bottom level, vehicle-specific characteristics are interacted
with household characteristics, along with vehicle age and vehicle manufacturer fixed effects.
Second, and most important, I use household panel data to observe and control for vehicle
persistence in a household’s holdings, the tendency for a consumer to hold onto a vehicle for
several years after purchase. Persistence is controlled for both at the type level (holding the
same types of cars over time) and at the vehicle level (holding the exact same vehicle over time),
and its effect varies with observable household characteristics.
For the period from 1999-2009, conditional on households which own vehicles, the
vehicle usage model predicts a short-run elasticity of -0.22 and a long-run elasticity of -0.38. For
all households, simulations find a short-run own-price elasticity of gasoline demand of -0.20 and
medium-run elasticities beginning at -0.32 two years after the price shock and increasing to -0.44
ten years after the shock. Using results from the National Research Council, I find that a 20%
gasoline tax on constant 1999 gas prices and a constant 1999 vehicle choice set over time (i.e.,
no technological advancement in vehicle attributes) would have generated benefits from reduced
carbon emissions and oil dependency (expressed in 2001 present discounted values) of $11.5
billion over ten years, with $2.7 billion in the first two years, an additional $4.6 billion over the
next four years, and a remaining $4.3 billion in the last four years. Because manufacturers chose
to use technological advancements in engine efficiency to increase horsepower and hold MPG
ratings roughly constant over this period, I find that the benefit diminishes to $6 billion over ten
years.
Chapter 2: Examining the Impact of Hybrids on the U.S. Automobile Market
I investigate the introduction of hybrids to the United States market, specifically the
introduction of the 2004 Toyota Prius. Although hybrids had been introduced in America as
early as 1999, the unique combination of advances in hybrid design and rapidly rising gas prices
caused the 2004 Toyota Prius to become the first successful U.S. hybrid. I construct a structural
model of vehicle choice which interacts vehicle characteristics with household demographics,
and I use highly detailed vehicle registration data from 2000-2009 with this model to estimate
consumer demand for vehicles over this period. Once estimates are obtained, I run
counterfactuals in which hybrids do not exist across this period and compare to obtain estimates
of compensating variation for each consumer, the amount of money they would each require to
be indifferent between the counterfactual market without hybrids and the true market with
hybrids. From this, I compute the total social welfare that hybrids have brought to the U.S.,
which can help inform decisions to incentivize and subsidize fleet progression toward
alternative-fuel vehicles.