Flavio Souza: Investigating consideration and choice. Exploring a goal-based choice set formation and purpose-driven domestic fuel consumption in India

In this talk, I will cover two different research threads that I have been focusing on: the first which was the focus of my PhD and can potentially be applied to Development Economic studies, and the second, which investigates the unintended consequences of carbon taxes on domestic fuel consumption. First, individual choice is often constrained, whether by, inter alia, individual characteristics (e.g., age), contextual factors (e.g., availability of options) and attributes of alternatives (e.g., price).

Organised by Agricultural Economics and Rural Policy

Thu 12 October 2017 12:30 to 13:30

Venue Leeuwenborch, gebouwnummer 201
Room C82

Decision-making studies show that neglecting this process leads to ascribing probabilities to alternatives that were never considered. In this work I proposed and tested empirically the conjecture that, in addition to external constraints, personal goals (as internal, subjective constraints) can help define the set of alternatives worthy of consideration. For the second part of presentation, I describe a study that focused on the effects of a carbon tax for Indian households. In particular, whereas the energy ladder theory points to a shift in energy sources usage as a function of income levels, findings that households use multiple sources of energy across the globe suggest a problem-solving approach to fuel choice.

In this study we develop a methodology that models the substitution and complementarity patterns accounting for (i) which fuel sources and (ii) how much of each fuel source is used. We tested this methodological approach empirically using survey data from 100,000 households in the National Sample Survey Reports in India. Our findings quantify these consumption patterns as a function of the increase in energy expenditures, and more importantly highlight how different policies affect energy consumption. I conclude each section by pointing to research extensions (including potential) in disciplines such as development economics and public health.