Yanjun (Penny) Liao


Resources for the Future


I am an applied microeconomist and Fellow at Resources for the Future. My current research focuses on behavioral and market responses to extreme weather events and environmental risks, as well as climate adaptation policies. I also study consumer behavior in the adoption of energy-efficient technologies and renewables.

I am also a research fellow at the Wharton Risk Center, where I conducted my postdoctoral research during 2019-21. Before that, I earned my Ph.D. in economic from UC San Diego in 2019.

Click here for my full CV.


  • Climate adaptation
  • Natural disaster policy
  • Climate financial risk
  • Energy and transportation


  • Ph.D. in Economics, 2019

    University of California, San Diego

  • B.A. in Economics, 2013

    University of Hong Kong



“Weather and the Decision to Go Solar: Evidence on Costly Cancellations” Journal of the Association of Environmental and Resource Economists, no.1 (January 2020): 1-33.
Manuscript, Online Appendix

Working Papers

“What’s at Stake? Understanding the Role of Home Equity in Flood Insurance Demand” (with Philip Mulder)
Current version: July 2021. In submission.
– Also on SSRN

Millions of properties in the U.S. are exposed to increasing threats from natural disasters. Yet, a large majority of at-risk homes are uninsured against the costliest disaster: flooding. Floods cause elevated rates of mortgage delinquency and default that can impact the broader housing finance system. In this paper, we provide the first empirical evidence that low home equity among leveraged households is an important driver of low flood insurance take-up. To isolate the causal effect of home equity on flood insurance demand, we study the response of insurance take-up to sudden house price changes over the housing boom and bust in the 2000s. We find that insurance take-up follows the dynamics of house prices in each market over the boom-bust cycle, with a home price elasticity around 0.3. Exploiting variation in foreclosure laws, we further find that the response is stronger where mortgage default is less costly. A suite of additional tests all suggest that mortgage default acts as implicit disaster insurance and crowds out formal flood insurance. As a result, households do not fully internalize their disaster risk.

“The Fiscal Impacts of Wildfires on California Municipalities” (with Carolyn Kousky)
Current version: May 2021. Conditionally accepted at Journal of the Association of Environmental and Resource Economists.
– Also on SSRN

This paper provides some of the first empirical estimates of the impact of natural disasters on the subcomponents of municipal budgets. We combine detailed municipal financial data from 1990-2015 with data on historical wildfire perimeters in California. We find that wildfires increase both revenues and expenditures. Sales taxes temporarily increase. Property taxes increase to a permanently higher level; this appears due to California law that limits reassessments of property until time of sale. Wildfires also cause a long-term increase in local spending on community development and public safety. The overall impact of wildfires on municipal budgets is negative and substantial. That said, in comparison to the spending by state and federal governments on wildfire suppression and response, municipalities are surprisingly insulated from the costs of wildfires.

“How Hurricanes Sweep Up Housing Markets: Evidence from Florida” (with Joshua Graff Zivin and Yann Panassi√©)
Current version: April 2021. In submission.
– Also NBER Working Paper #27542

This paper examines the impacts of hurricanes on the housing market and the associated implications for local population turnover. We directly characterize equilibrium dynamics in the housing market using micro-level estimates. For this purpose, we assemble a comprehensive dataset by combining housing transactions, parcel tax assessments, and hurricane history in Florida during 2000-2016. Our results show that hurricanes cause an increase in equilibrium prices and a concurrent decrease in the probability of transaction for homes in affected areas, both lasting up to three years. Together, these dynamics imply a negative transitory shock to the housing supply as a consequence of the hurricane. Furthermore, we match buyer characteristics from mortgage applicationsto provide the first buyer-level evidence on population turnover. We find that incoming homeowners in this period have higher incomes, leading to an overall shift in thelocal economic profile toward higher-income groups. Our findings suggest that market responses to destructive natural disasters can lead to uneven and lasting demographicchanges in affected communities, even with a full recovery in physical capital.

“Extreme Weather and the Politics of Climate Change: a Study of Campaign Contributions and Elections” (with Pablo Ruiz Junco)
Current version: February 2021. Conditionally accpeted at Journal of Environmental Economics and Management.

In this paper, we study how extreme weather and natural disasters affect political outcomes such as campaign contributions and elections. Weather events associated with climate change may influence these outcomes by leading voters to re-evaluate the incumbent politician’s environmental position. In a short-run analysis, we find that the number of online contributions to the Democratic Party increases in response to higher weekly temperature, and that the effect is stronger in counties with more anti-environment incumbent politicians. In a medium-run analysis we find evidence that, when a natural disaster strikes, the election becomes more competitive if the incumbent has a more anti-environment stance: total campaign contributions increase for both candidates but skewed towards the challenger, the race is more likely to be contested, and the incumbent is less likely to be re-elected. These results suggest that extreme weather events carry a moderate electoral penalty for anti-environment incumbents during 1990-2012, which has eroded but not fundamentally changed the large electoral advantage they enjoy. This mechanism will play a more important role as the public awareness of climate change continues to increase.

Work in Progress

“Negative Rebound: Fuel Economy Standards and Miles Traveled”

“Flood Risk Mapping: Is There a Blue-Lining Effect?"

“Flood Insurance Reforms, Housing Market Dynamics, and Adaptation to Climate Risks”

“Sea Level Rise and the Social Cost of Flood Insurance Subsidies”


Graduate Courses

  • ECON 281: Economics of the Environment (2016, 2017, Scripps Institute of Oceanography, UCSD)
    Co-instructor with Mark Jacobsen

  • GPEC 488: Environmental and Regulatory Economics (2017, School of Global Policy and Strategy, UCSD)
    Co-instructor with Joshua Graff Zivin

Undergraduate Courses

  • ECON 120A/B: Econometrics (2014-2019)
  • ECON 5: Data Analytics/Social Sciences (2018)
  • ECON 152: Public Economics (2018)
  • ECON 1: Principles of Microeconomics (2015, 2018)
    Teaching assistant at the Department of Economics, UCSD

Teaching Interests

  • Econometrics (R/Stata)
  • Economics of Climate Change
  • Environmental Economics


  • yjpenny@gmail.com
  • St. Leonard's Court, Suite 130, 3819 Chestnut Street, Philadelphia, PA 19104