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Derek Lemoine: Predicting future behavior despite a relative scarcity of data

Posted by Lauren Hertel on Tuesday, May 21 2019

Fellows: 

Fellow Derek Lemoine is an Associate Professor of Economics at The University of Arizona, where his research combines economic theory and computational methods to better understand the dynamics of environmental policy and of energy systems.

Although his work on electric vehicles (EV) was during his graduate studies at the University of California, Berkeley, he still follows the field. At the time he was studying plug-in hybrids and EVs, he says, a lot of his analysis was hypothetical because there really was not a lot of data about the vehicles. “In economics you really want data,” says Lemoine.

That relative scarcity of data continues to be a challenge for economists interested in estimating how EVs will be used and whether policies will be effective at stimulating adoption.

“With policies to promote EVs, it is a bit of a chicken-and-egg problem,” says Lemoine. “Often you have to make policies before you have data.”

Instead, utilities and nonprofits are testing programs on their own, then academics are coming in to extract the data collected. As a result, it is difficult if not impossible to build models that will accurately predict future behavior based on actual data.

And building models is important, says Lemoine, for example to achieve more socially efficient adoption patterns of EVs. Who are the households that adopt and why? What would have been driven, if not an EV? Answering these questions requires good data on who is and who is not adopting EVs. With models grounded in data, you could reasonably predict who would adopt next and how to develop an effective subsidy program to accelerate adoption.

In terms of growth of EVs over the next ten years, Lemoine says a lot will depend on demand. There will be a lot of potential impacts from greater adoption of EVs, so pricing models and regulatory policies will be particularly important. Harmonizing policies so they work together will be critical, says Lemoine. For instance, if you drive the price of electricity up by demanding it is sourced cleanly while maintaining the current price of gasoline, you can make EVs look less attractive than they perhaps should be.

There will also be new areas for important research, such as figuring out the best business model for charging stations (one or many networks? government support or not?), forecasting the evolution of technology, designing incentives for households to adjust charging to help manage the electricity grid, and more.

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