2026 Theses Doctoral

Essays in Public Economics

Nober, William H.

This dissertation contains three essays concerning the economics of large-scale public policy in the United States.

The first chapter studies the impact of new technologies on the market for electricity. In electricity markets, the ability to trade power across space is constrained by the capacity of the wire transmission network. Renewable energy and AI-linked demand growth exacerbate these constraints. Recent technological advances allow more electricity to be traded across time via large batteries. This paper investigates whether batteries, in the course of performing time arbitrage, also ease congestion across space. Empirical tests of price patterns before and after battery opening do not reveal a clear pattern. To more accurately capture batteries' price effects and compare them to the price effects of building new wires, I replicate the pricing model of an electric grid operator and simulate prices on Texas's grid under several scenarios using micro-data on power plant operations and spatial linkages. Counterfactual analysis of transmission and storage buildout reveals significant substitution patterns in price effects: 2025 battery entrants in Texas may have substituted for around 20% of the benefits of a large planned wire building project. The transmission benefits of batteries are on the same order of magnitude as their capital costs.

The second chapter investigates tradeoffs in state higher education financial aid policy. States frequently operate broad financial aid programs for local students to attend college. Merit aid programs target students on the basis of student academic performance, while traditional means-tested programs allocate based on financial need. This paper investigates a setting in which a U.S. state operates simultaneous programs of both types to test how students respond at the margin to each. In regression discontinuity estimates, merit aid induces a significant initial enrollment response at 4-year colleges among weaker students but not among stronger ones, with the caveat that the subsidy size being tested is much larger for the weaker students. Need-based aid does not have statistically significant enrollment effects. The initial enrollment response from merit aid persists to students' second years, but not to graduation for marginally eligible students. Results do not suggest that the studied awards shift early-career earnings for marginally eligible students.

The third and final chapter, coauthored with Zachary Liscow and Cailin Slattery, studies state capacity and infrastructure costs. We ask: how much is a good bureaucrat worth? We study this question in the case of U.S. infrastructure construction, a setting where costs are high and rising. We find that higher-quality government engineers deliver observationally similar projects at significantly lower cost; going from the 25th to 75th percentile of engineer quality is associated with a 14% reduction in project-level costs. Further, losing expertise to retirement has substantial consequences: the cost increase arising from engineer departures is six times the size of their wages. Our results highlight the value of experience and human capital in public organizations.