“The Demand for Energy-Using Assets among the World’s Rising Middle Classes”Abstract:We study decisions to acquire energy-using assets in the presence of rising incomes. We develop a theoretical framework to show that credit-constrained, poor households are unlikely to use additional income to buy appliances. The effect of income growth on asset purchases is stronger at higher income levels. We use large and plausibly exogenous shocks to household income generated by the conditional-cash-transfer program in Mexico, Oportunidades, to show that asset acquisition is nonlinear, depends, as predicted, on the pace of income growth, and both effects are economically large among beneficiaries. Our results may help explain important worldwide trends in energy use.Link to paperAbout the Speaker:Catherine Wolfram is Cora Jane Flood Professor of Business Administration at the Haas School of Business and a researcher at the UC Energy Institute. Her research focuses on the economics of energy markets. She has studied the impact of environmental regulation on energy markets and the effects of electricity industry privatization and restructuring around the world. She received a PhD in economics from MIT. Before joining the faculty at UC Berkeley, she was an assistant professor of economics at Harvard University. See Catherine Wolfram’s complete bio.