Research

Job Market Paper

“Co-Adoption of Durable Green Technologies and Financial Constraints”

• Draft upon request.
• Abstract: Electrification and adoption of renewable energy technologies are seen as key inputs to the transition away from fossil fuels (IEA 2021). Furthermore, residential solar (PV) and electric vehicles (EV) may exhibit economic complementarities. Solar generation cheapens precisely the input an electric vehicle consumes. However, co-adoption of these technologies faces a barrier: both require large upfront outlays of capital. This paper studies how financial constraints shape the joint adoption of these green durable products. Linking Connecticut household-level data on technology adoption, financing choices, and credit records, I document that co-adoption rises steeply with credit access; the positive association between owning one technology and owning the other reverses for low-credit households. To capture the intertemporal tradeoffs across solar and vehicle purchase decisions due to borrowing capacity constraints, I build and estimate a life-cycle model in which households facing income uncertainty choose consumption, savings, product adoption and financing (cash or credit). My estimates imply that financial constraints are the binding margin: two-thirds of non-adopting households would adopt absent financial frictions, and observed co-adoption patterns understate the structural complementarity.

Working Paper

1. “Carbon Labels and Consumer Flight Choices” (Steve Zhang & Raluca M. Ursu) Latest Draft
   • Major Revision at Marketing Science
   • Abstract: Climate change concerns have led many companies to adopt labels that disclose their carbon footprint to consumers. However, the effectiveness of such labels for both firm outcomes and consumer behavior remains largely unexplored. To measure these effects, we rely on data from a major flight search platform that exogenously timed the introduction of carbon labels for qualifying flights on its platform. These data allow us to use quasi-experimental methods to understand how labels affect firms and consumers. We find that consumers are more likely to make a purchase when labels are present, which benefits the platform. However, such converting consumers are not necessarily more likely to buy a lower-emission/labeled flight. In addition, they search more when environmental information is available. Finally, among a subset of similar flights, we find that options with a label have higher conversion rates. Our findings suggest consumers value/trust the platform more when labels are present, but will only switch to labeled options if they can avoid sacrificing other product features. Heterogeneity across traveler types and political orientation is also explored. These results highlight nuanced effects of carbon labeling, offering insights for firms and policymakers designing sustainability disclosures in digital marketplaces.
2. “Nature Exposure and Sustainable Product Purchases” (Bryan Bollinger, Emma Gu, Uma Karmarkar, Randi Kronthal-Sacco, Steve Zhang, and Levin Zhu)
   • Draft upon request.
   • Abstract: Although there is extensive research on the variability in consumers’ willingness to engage in sustainable behaviors, it is crucial to understand contextual factors that can influence such behaviors for policy development. In this paper, we examine the role of increased exposure to the natural environment on sustainable product purchases using detailed grocery store transaction data and cell phone tracking data capturing park visitation. We demonstrate that increased exposure to the natural environment leads to increases in purchases of sustainability-labeled consumer packaged goods in the four categories studied. In a pre-registered experiment, we show that (hypothetical) exposure to nature increases donations to environmental organizations and the importance of sustainable behaviors, with these effects being mediated by nature connectedness.

Selected Research-in-Progress

1. “AI Agents vs. Consumers in Search: The Role of Vertical and Horizontal Differentiation” (Steve Zhang & Raluca M. Ursu)
2. “Disintermediation, Platform Competition, and Recommendation Algorithm” (Steve Zhang* & Hanlin Zhao*)
3. “How Capacity Constraints in Sharing Economy Impact Consumer Welfare” (Steve Zhang* & Masakazu Ishihara)