Economics Faculty Publications and Presentations Copyright (c) 2013 Boise State University All rights reserved. http://scholarworks.boisestate.edu/econ_facpubs Recent documents in Economics Faculty Publications and Presentations en-us Fri, 01 Feb 2013 01:42:43 PST 3600 Financial Services Industry PAC Contributions and Senate Committee Membership http://scholarworks.boisestate.edu/econ_facpubs/24 http://scholarworks.boisestate.edu/econ_facpubs/24 Wed, 30 Jan 2013 13:28:41 PST This paper explores the relationship between relevant senate committee membership and campaign contributions from financial services industry political action committees (PACs) from 1998 to 2002. Since this was a period of significant legislative activity affecting the industry, it provides a fruitful time period to investigate the relationship between contributions and committee membership. It is found that membership on the Senate Banking Committee is consistently related to contributions from financial services PACs. Membership on the Senate Finance Committee is related to PAC contributions from some sectors of the industry for some time periods. It is also found that contributions are significantly higher for those senators facing re-election in the particular election cycle. The importance of relevant committee membershipto PAC contributions in the senate is consistent with previous work dealing with the House.

]]> Randall W. Bennett et al. The Implications of Surface-Ground Water Hydrology for Optimal Conjunctive Management http://scholarworks.boisestate.edu/econ_facpubs/23 http://scholarworks.boisestate.edu/econ_facpubs/23 Fri, 07 Dec 2012 14:48:39 PST This article addresses the question: How does the hydraulic relationship between surface and ground water affect the economically optimal allocation of water across surface and ground water irrigators? We present an economic model of optimal conjunctive water management that incorporates different hydraulic relationships between surface and ground water.2 We then use that model to simulate observed conditions on the Eastern Snake Plain. The results of the simulation analysis demonstrate that optimal conjunctive management differs significantly with the form of the hydraulic relationship between surface and ground water. More generally, the analysis shows that incorporating the characteristics of natural systems into an economic analysis can inform more efficient policy decisions.

]]> Kelly M. Cobourn et al. Spatiotemporal Analysis of Prior Appropriations Water Calls http://scholarworks.boisestate.edu/econ_facpubs/22 http://scholarworks.boisestate.edu/econ_facpubs/22 Mon, 19 Mar 2012 12:08:23 PDT A spatiotemporal model is developed to examine prior appropriations–based water curtailment in Idaho’s Snake River Plain Aquifer. Using a 100 year horizon, prior appropriations–based curtailment supplemented with optimized water use reductions is shown to produce a spatial distribution of water use reductions that differs from that produced by regulatory curtailment based strictly on initial water right assignments. Discounted profits over 100 years of crop production are up to 7% higher when allocation is optimized. Total pumping over 100 years is 0.3%, 3%, and 40% higher under 1, 10, and 100 year prior appropriations–based regulatory curtailment, respectively.

]]> Levan Elbakidze et al. Impact of Air Quality Regulations on Entrepreneurial Activity http://scholarworks.boisestate.edu/econ_facpubs/21 http://scholarworks.boisestate.edu/econ_facpubs/21 Thu, 08 Dec 2011 10:11:11 PST The objective of this paper is to examine the impact of NAAQS non-attainment status on the entrepreneurial activity in a metropolitan statistical area (MSA). Most of the existing research on the relationship between non-attainment and the financial robustness of areas focuses on the big polluters (e.g., plastics, organic chemicals, steel smelting and refining, etc.), and examines how many of the big polluters failed or relocated, measured by the change in the number of plants/businesses when an area moved from attainment to non-attainment. Our paper will use a 306 MSA panel data set over the 1989-2003 timeframe, to address the question more comprehensively by looking at all industries, not just a targeted few polluters. Controlling for other time-variant confounding effects, such as population growth, per-capita income, tax rate changes, minimum wage rates, energy costs, regional inflation measures, and spatial phenomena (such as, natural disasters) we isolate the effect of non-attainment status on large polluters as well as the linkage industries. We show that if an area is designated non-attainment status in a particular year, it leads to a decline in the total number of business starts in the MSA in the following year. We also determine whether the impact of non-attainment varies across businesses of different sizes.

]]> Scott E. Lowe et al. Implications of Simultaneity in a Physical Damage Function http://scholarworks.boisestate.edu/econ_facpubs/20 http://scholarworks.boisestate.edu/econ_facpubs/20 Wed, 17 Aug 2011 15:30:57 PDT A modeler must often rely on highly simplified representations of complex physical systems when analyzing associated economic issues. Herein, we consider a management problem in which a bioeconomic system exhibits simultaneity in processes governing productivity and damage. In this case, it may benefit the producer to sacrifice productivity to reduce the costs associated with increased damage. We specify empirically a structural damage relationship that explains the biological process by which an invasive species damages a host and estimate the structural model and its reduced form with an exceptional dataset on infestation of olives by the olive fruit fly. We contrast the results of these models with the approach typically taken in the economic literature, which expresses damage as a function of pest density. The population-based approach introduces significantly greater bias into the individual grower's choice of damage-control inputs than estimates based on the structural model.

]]> Kelly M. Cobourn et al. Housing Market Effects of Inclusionary Zoning http://scholarworks.boisestate.edu/econ_facpubs/19 http://scholarworks.boisestate.edu/econ_facpubs/19 Wed, 17 Aug 2011 12:00:10 PDT Many communities across the country face affordable housing challenges. An increasing number of communities are considering inclusionary zoning as a response. Inclusionary zoning programs, which require developers to sell a certain percentage of newly developed housing units at below market rates to lower income households, are politically attractive because they are viewed as a way to promote housing affordability without raising taxes or using public funds. Standard economic theory, however, suggests that such programs act like a tax on housing construction. And just like other taxes, the burdens of inclusionary zoning are passed on to housing consumers, housing producers, and landowners. As a result, inclusionary zoning policies could exacerbate the affordable housing problem that they are designed to address.

Although debate over the merits of inclusionary zoning has continued for nearly three decades, there have been no rigorous studies on their effects on housing prices and starts. We offer such an analysis here, estimating the effects of inclusionary zoning policies on single family housing prices, single family and multifamily housing starts, and the size of single family housing units in California over the period from 1988 to 2005. In our analyses, we are able to isolate the impacts of inclusionary zoning programs by carefully controlling for spatial and temporal conditions, such as the neighborhood or school district within which the house is located, and changing market conditions over time.

]]> Gerrit-Jan Knaap et al. Committing to Carbon Credits http://scholarworks.boisestate.edu/econ_facpubs/18 http://scholarworks.boisestate.edu/econ_facpubs/18 Tue, 26 Jul 2011 13:52:32 PDT Current legislation and regulatory measures to reduce atmospheric concentrations of greenhouse gases have their roots in climate change challenges presented by the United Nations Framework Convention on Climate Change and the Kyoto Protocol. Although the US has not signed the Kyoto Protocol, President Bush announced on 16 April, 2008 that he wants to stop the growth of greenhouse gas emissions by 2025 and is looking to the energy generation sector as a key driver of those cuts.

]]> John Eustermann et al. A Multi-Period Analysis of Two Common Livestock Management Strategies Given Fluctuating Precipitation and Variable Prices http://scholarworks.boisestate.edu/econ_facpubs/17 http://scholarworks.boisestate.edu/econ_facpubs/17 Tue, 26 Jul 2011 13:46:09 PDT Many areas of the US recently endured a severe drought and management strategies to cope with the lack of forage production varied. A multi-period mathematical model is presented that estimates the outcomes of two common producer responses to changes in precipitation, partial liquidation and purchasing hay, given fluctuating cattle prices over a long term planning horizon. Results were further summarized with regression analysis and selected elasticities were calculated to reflect the sensitivity of outcomes to variability in precipitation and livestock prices. Although little impact was seen from utilizing additional hay as a strategy during drought, producers who follow this strategy are in a position to market more animals immediately post drought in general, resulting in better long run financial outcomes. Elasticity estimates suggest that profitability is more sensitive to variability in prices but that optimal choices of management strategies are more sensitive to variability in precipitation.

]]> John P. Ritten et al. Ranchers Diverse in Their Drought Management Strategies http://scholarworks.boisestate.edu/econ_facpubs/16 http://scholarworks.boisestate.edu/econ_facpubs/16 Tue, 26 Jul 2011 13:33:46 PDT Portions of the western U.S. are experiencing the worst drought in 80 years (Piechota et al. 2004). Figure 1 indicates that Wyoming has experienced multiple periods where precipitation was below normal for consecutive years, with the most recent period being between 2000 and 2005. Average annual precipitation has been trending downward since 1895 when official records were kept. Moreover, research suggests that drier summers could become more common as the global climate changes (Hengeveld 2000). The most recent period of drought has reduced range productivity, lowered irrigation water supplies and ultimately forced some ranchers to reduce herd sizes. Many producers culled their herds at a time when cattle prices were below the cyclic peak (between the years of 2000 to 2004), resulting in lower sales revenue. They also incurred higher feed costs to maintain the remaining herd. Together, these factors contribute to reduced profitability. Additionally, breeding livestock purchased now to restock drought liquidated herds would be done so at or near the peak of the most recent cattle price cycle. Current forecasts suggest that cattle prices are likely to start their cyclical decline within the next two years (Livestock Marketing Information Center 2006). Livestock purchased now or in the next several years would likely generate negative returns throughout their productive life, even if a ranch had the available feed resources, causing restocking to be less desirable at this time (O’Neill et al. 1998). The economic consequences of restocking at this point in time coupled with smaller herd sizes from drought liquidation puts ranchers in a weaker financial position to survive the downside of this most recent price cycle. The combined effect of these events has concerned many ranchers, and they are turning to professionals from land grant universities and elsewhere for help or they are selling off their ranches altogether.

]]> Christopher T. Bastian et al. What is the Carbon Market: Is There a Final Answer? http://scholarworks.boisestate.edu/econ_facpubs/15 http://scholarworks.boisestate.edu/econ_facpubs/15 Mon, 25 Jul 2011 16:24:36 PDT The potential for sequestering carbon in agricultural and forestry sinks to generate carbon credits has received increased attention by legislative bodies, government and nongovernment organizations, private firms, farm managers, and universities over the last few years. This increased interest is primarily due to international regulation of greenhouse gas (GHG) emissions under the Kyoto Protocol. Although the United States has not ratified the Kyoto Protocol, a voluntary market and many state and regional initiatives have been developed to reduce atmospheric concentrations of GHGs. In addition, recent legislation proposed within the United States promotes a cap-and-trade system for reducing GHGs (Pew Center 2008; RFF 2008). Since our first examination of fledging carbon credit markets and factors affecting them (Williams et al. 2005), many new markets have developed, as well as new opportunities to reduce GHG emissions.

]]> Jeffery R. Williams et al. Range Livestock Strategies Given Extended Drought and Different Price Cycles http://scholarworks.boisestate.edu/econ_facpubs/14 http://scholarworks.boisestate.edu/econ_facpubs/14 Tue, 19 Jul 2011 15:49:18 PDT Portions of the U.S. have recently or are currently experiencing extended periods of drought. Producers considering the purchase of breeding stock to rebuild herds while forage supplies recover could be doing so at or near the top of the current cattle price cycle. This research investigates purchasing additional hay and partial liquidation as management strategies under various scenarios of drought and price cycles. Results indicate that purchasing hay may be a more risky strategy than partial liquidation, and it only provides positive returns over a 12-year planning horizon when extended drought occurs during a trough-to-trough price cycle.

]]> Christopher T. Bastian et al. Beyond the Veil: The Influence of Islam on Female Entrepreneurship in a Conservative Muslim Context http://scholarworks.boisestate.edu/econ_facpubs/13 http://scholarworks.boisestate.edu/econ_facpubs/13 Mon, 18 Jul 2011 16:27:43 PDT Although there is a well developed corpus of knowledge concerning female entrepreneurs in developed nations, relatively less is known about counterparts in developing and transitional economies. This paper uses a survey of 180 women entrepreneurs in Bahrain to examine the influence of various socio-economic factors on their decision to choose entrepreneurial careers. We find human capital to be instrumental in respondent’s choice of business, type of financing sought, and level of networking. The expectation that ties to religious groups would confer an advantage when doing business in an Islamic country was not supported. Nevertheless, women who abided by Islamic customs were accepted in a typically male-dominated business world.

]]> John C. McIntosh et al. Climate Variability and Water Infrastructure: Historical Experience in the Western United States http://scholarworks.boisestate.edu/econ_facpubs/12 http://scholarworks.boisestate.edu/econ_facpubs/12 Tue, 05 Jul 2011 15:36:14 PDT Greater historical perspective is needed to enlighten current debate about future human responses to higher temperatures and increased precipitation variation. We analyze the impact of climatic conditions and variability on agricultural production in five semi-arid western states. We assemble county-level data on dams and other major water infrastructure; agricultural crop mixes and yields; precipitation and temperature; soil quality, and topography. Using this extensive data set, we analyze the impact of water infrastructure investments on crop mix and yields in affected counties relative to similarly-endowed counties that lack such infrastructure. We find that water infrastructure smooths agricultural crop production and increases the likelihood of a successful harvest, especially during times of severe drought or excessive precipitation.

]]> Zeynep K. Hansen et al. The Importance of Committee Assignment: Health Care Industry Political Action Committee Contributions and the House of Representatives http://scholarworks.boisestate.edu/econ_facpubs/11 http://scholarworks.boisestate.edu/econ_facpubs/11 Tue, 07 Jun 2011 16:01:14 PDT This paper examines the relationship between political action committee (PAC) contributions from four sectors of the health care industry and committee membership in the House of Representatives over three election cycles, 1998–2002. The hypothesis tested is that members of the House who serve on committees with oversight responsibility for the health care industry are more likely to receive contributions from health care industry PACs than members of the House who do not serve on these committees. We find mixed support for the hypothesis.

]]> Christine Loucks et al. The City-Level Effects of the 1990 Clean Air Act Amendments http://scholarworks.boisestate.edu/econ_facpubs/10 http://scholarworks.boisestate.edu/econ_facpubs/10 Thu, 26 May 2011 14:44:23 PDT This paper examines whether the 1990 Clean Air Act Amendments caused the decline in ambient concentrations of particulate matter (PM10) in California over the 1990–2000 period. Consistent with previous studies, we find that PM10 nonattainment status at the county level is not a significant factor in explaining the reductions in PM10. However, when we allow for spatially heterogeneous treatment effects within nonattainment counties, and incorporate measures of community characteristics, climate, geography, transboundary pollution, and industrial composition and scale, we find that nonattainment designations at the city level account for a 6% reduction in ambient PM10 concentrations.

]]> Maximilian Auffhammer et al. Reducing Standard Errors by Incorporating Spatial Autocorrelation into a Measurement Scheme for Soil Carbon Credits http://scholarworks.boisestate.edu/econ_facpubs/9 http://scholarworks.boisestate.edu/econ_facpubs/9 Mon, 11 Apr 2011 15:37:08 PDT Several studies have suggested that geostatistical techniques could be employed to reduce overall transactions costs associated with contracting for soil C credits by increasing the efficacy of sampling protocols used to measure C-credits. In this paper, we show how information about the range of spatial autocorrelation can be used in a measurement scheme to reduce the size of the confidence intervals that bound estimates of the mean number of C-credits generated per hectare. A tighter confidence interval around the mean number of Ccredits sequestered could increase producer payments for each hectare enrolled in a contract to supply C-credits. An empirical application to dry land cropping systems in three regions of Montana shows that information about the spatial autocorrelation exhibited by soil C could be extremely valuable for reducing transactions costs associated with contracts for C-credits but the benefits are not uniform across all regions or cropping systems. Accounting for spatial autocorrelation greatly reduced the standard errors and narrowed the confidence intervals associated with sample estimates of the mean number of C-credits produced per hectare. For the payment mechanism considered in this paper, tighter confidence intervals around the mean number of C-credits created per hectare enrolled could increase producer payments by more than 100 percent under a C-contract.

]]> Sian Mooney et al. An Examination of the Differential Impact of Highway Capital Investment on Economically Disparate Appalachian Counties in the USA http://scholarworks.boisestate.edu/econ_facpubs/8 http://scholarworks.boisestate.edu/econ_facpubs/8 Wed, 30 Mar 2011 10:30:19 PDT The economic performance of Appalachian counties in the USA varies substantially across the region. The Appalachian Regional Commission has divided the 410 counties into four major categories: distressed, transitional, competitive, and attainment. This paper applies spatial models that account for spatial interdependence to evaluate the impact of Appalachian highways on economically disparate counties. Using a spatial autoregressive model in a production function framework, it is found that distressed counties gain from highways whereas competitive counties actually suffer from a negative backwash effect that tends to draw productive activity away from these counties into neighboring counties.

]]> Samia Islam A Method for Constructing Commodity by Industry Flow Matrices http://scholarworks.boisestate.edu/econ_facpubs/7 http://scholarworks.boisestate.edu/econ_facpubs/7 Wed, 30 Mar 2011 10:22:30 PDT This paper presents theory and methods used to construct an interregional commodity by industry flow matrix for the United States. The interregional flow matrix method involves the construction of single-state (and DC) social accounting matrices (SAMs) using data derived from IMPLAN. Once complete, the interregional flows connecting states are estimated using a method based on the commodity flow survey data published by the Bureau of Transportation Statistics. The estimated interregional SAM is then adjusted to insure the integrity of intra-regional and system-wide accounts. The procedures have been designed with ease of replicability as a goal so that updates and extensions of the database can be generated efficiently and at low cost as new data are released. The resulting US interregional framework describes flows within and among the 51 regions. The method is flexible and will provide a valuable database for a broad range of analyses on regions, interregional relationships, and policy.

]]> Randall W. Jackson et al. Comparisons of Carbon Pools and Economic Profitability for Managed Ponderosa Pine Stands in Wyoming, USA http://scholarworks.boisestate.edu/econ_facpubs/6 http://scholarworks.boisestate.edu/econ_facpubs/6 Wed, 23 Feb 2011 09:40:56 PST A forest carbon (C) sequestration project was conducted to evaluate the economic incentives that would be required by landowners to engage in C trading under different management regimes. Costs associated with joint management for C sequestration and timber would be valuable for establishing sound forest C trading systems. In this study, we calculated the C yield and amortized value of three Wyoming, ponderosa pine stands. The management practices examined were, unmanaged, even-aged (regene-ration after clear-cut) and uneven-aged (selectively harvested). Costs and revenues associated with three stands were converted into 2006 real dollars using the all commodity producer price index to facilitate a comparison among the net revenues of three stands. Net revenues were annualized using a conservative annual interest rate of 4.5%. Our even-aged stand had the highest annual average C yield of 2.48 Mg·ha-1·a-1, whereas, the uneven-aged stand had the lowest C accumulation (1.98 Mg·ha-1·a-1). Alternatively, the even-aged stand had the highest amortized net return of $276·ha-1·a-1 and the unmanaged stand had the lowest net return of $64 ha-1a-1. On the plots examined, an annual payment of $22 for each additional Mg of C sequestered would encourage a change from uneven aged management to an unmanaged stand that sequesters additional C, in the absence of transactions costs.

]]> A. Chatterjee et al. Housing Market Effects of Inclusionary Zoning http://scholarworks.boisestate.edu/econ_facpubs/5 http://scholarworks.boisestate.edu/econ_facpubs/5 Fri, 04 Feb 2011 07:38:16 PST This article presents an empirical analysis of the effects of inclusionary zoning policies on housing prices and starts in California during the period from 1988 through 2005. The analysis compares cities with and without such policies and isolates the effects of inclusionary zoning programs by carefully controlling for spatial and temporal conditions, such as the neighborhood or school district within which the house is located and changing market conditions over time. The analysis found that inclusionary zoning policies had measurable effects on housing markets in jurisdictions that adopt them; specifically, the price of single-family houses increases and the size of single-family houses decreases. The analysis also found that, although the cities with such programs did not experience a significant reduction in the rate of single-family housing starts, they did experience a marginally significant increase in multifamily housing starts. The magnitude of this shift varied with the stringency of the inclusionary requirements. Finally, the analysis found that the size of market-rate houses in cities that adopted inclusionary zoning increased more slowly than in cities without such programs. The results are fully consistent with economic theory and demonstrate that inclusionary zoning policies do not come without costs.

]]> Antonio Bento et al.