An article coauthored by Associate Dr. Chen Zheng was recently announced as the 2023 Public Utility Research Center Prize winner. The annual award, sponsored by the University of Florida’s Public Utility Research Center, is awarded to the best paper in regulatory economics accepted for presentation at the International Industrial Organization Conference.
The winning article, “Unintended Consequences of Policy Interventions: Evidence from Home Affordable Refinance Program,” studies the unintended consequences of the Home Affordable Refinance Program (HARP) that strengthens the market power of incumbent leaders. The authors use HARP as a case study to quantify the welfare implication associated with the design of post-2008 financial crisis refinance relief programs. The main takeaway from the author’s analysis is the importance of understanding institutional detail when designing policies, with evidence suggesting that provisions limiting the competitive advantage of incumbent lenders concerning their existing borrowers should be a consideration in the design of policies such as HARP. Such insights could apply to other policies whose implementation depends on intermediaries with incumbent advantage with respect to targeted agents.
More information about the 2023 Public Utility Research Center Prize can be found here, and the full article is available below.