We are pleased to provide a forum for disseminating works-in-progress that support our mission to promote excellence in interdisciplinary, scholarly research on the economic and social development of lagging regions. These research papers focus on theories and history of regional development, methods for studying regions, and policies for stimulating their development. We expect that most of these papers will be published in both national and international academic journals.
China’s Inter-regional Trade of Virtual Water: a Multi-regional Input-output Modeling
Working Paper 2014-04
View Paper (27 pp., 1228 KB)
Abstract: This study focuses on the measure of inter-regional trade of virtual water, defined as the freshwater consumed for producing traded goods and services, to explain the relationship between China’s regional virtual water and the increasing water demand. By using the multi-regional input-output (MRIO) tables of 2002 and 2007 with the regional sectoral water use, this study analyzes virtual water in trade, domestic trade in virtual water, and the regional trade balance of virtual water. The results show that: (1) water use efficiency has increased in China; (2) the major source of the regional virtual water in trade are domestic inter-regional trade; and (3) a region’s virtual water depends on its water resources availability, economic structure, as well as the region’s position in domestic supply chain.
Cross-Hauling and Regional Input-Output Tables: The Case of the Province of Hubei, China
Yongming Huang, Anthony T. Flegg and Timo Tohmo
Working Paper 2014-03
View Paper (42 pp. 1,327 KB)
Abstract: Data for the Chinese province of Hubei are used to assess the performance of Kronenberg’s CHARM, a method that takes explicit account of cross-hauling when constructing regional input−output tables. A key determinant of cross-hauling is held to be the heterogeneity of the products of individual sectors, which is estimated using national data. However, contrary to the authors’ earlier findings for Finland, CHARM does not generate reliable estimates of Hubei’s sectoral exports, imports and volume of trade. It is crucial, therefore, especially in relatively small regions, to make adequate allowance for any known divergence between regional and national technology and heterogeneity.
Cross-Hauling in Input-Output Tables: Comments on CHARM
Working Paper 2014-02
View Paper (5 pp, 349KB)
Abstract: This brief note draws further attention to cross-hauling in regional input-output table estimation, and specifically identifies conceptual issues associated with Kronenberg’s CHARM method for adjusting input-output regionalization methods. Despite the shortcomings of the CHARM approach as it now stands, this is a very important line of research. I believe that progress made on the CHARM method is encouraging, and hope that future work will resolve remaining issues.
An Integrated Environmental and Economic Modeling Framework for Technological Transitions
(Paper presented to the Western Regional Science Association, San Diego, CA, February 17, 2014)
Working Paper 2014-01
Abstract: There is an increasing demand for models that address both environment and economy, and that also estimate or forecast the impacts of introducing new and markedly different technologies from those already existing in the systems under study. Because most conventional models are calibrated to recent data characterizing current economic structure and conditions, their standard turn-key operation will need to be replaced by more comprehensive algorithms and procedures designed to explicitly accommodate shifts in technology and economic structure. This paper lays out one viable alternative for integrating environmental and economic modeling frameworks, and focuses specifically on one of the major challenges to this kind of modeling, that of dovetailing life cycle assessment and input-output modeling frameworks. (Acknowledgements: This material is based upon work supported by the National Science Foundation under Grant No. 1235684 and USDA NIFA Award 2012-67009-19660.)
On the Finite Sample Properties of Pre-test Estimators of Spatial Models
Gianfranco Piras and Ingmar R. Prucha
Working Paper 2013-07
View Paper (pp. 22, 182 KB)
Abstract: This paper explores the properties of pre-tst strategies in estimating a linear Cliff-Ord -type spatial model when the researcher is unsure about the nature of the spatial dependence. More specifically, the paper explores the finite sample properties of the pre-test estimators introduced in Florax et al. (2003), which are based on Lagrange Multiplier (LM) tests, within the context of a Monte Carlo study. The performance of those estimators is compared with that of the maximum likelihood (ML) estimator of the encompassing model. We find that, even in a very simple setting, the bias of the estimates generated by pre-testing strategies can be very large in some cases and the empirical size of tests can differ substantially from the nominal size. This is in contrast to the ML estimator.
The State of Play in Poland’s Unconventional Shale and Oil Development
J. Wesley Burnett, Randall W. Jackson, and
Working Paper 2013-06
View Paper (pp. 20, 801 KB)
Abstract: Following the huge gas and oil rush in the US, the world’s gas and oil companies have been eyeing reserves in other countries including Poland, which is believed to be sitting on one of the largest reserves in the European Union. The Poles, seeking to diversify their energy sources and meet EU emissions standards, which are driving up electricity costs, met the news with tremendous fanfare. Following initial geological assessments, major international oil and gas companies soon made announcements to begin drilling operations in Poland. However, one of the major challenges of shale gas development is that is often requires voluminous speculative activity before the gas is successfully extracted. In the U.S. this was not such a problem because of several adventuresome energy firms willing to take on risk, but in Poland (and Europe in general) such firms are rare, and in former communist countries these firms are rarer still. This lack of critical infrastructure coupled with bureaucratic red tape in the permitting process has led to slow growth in exploration activities in Poland. Will Poland be able to successfully develop these resources? This manuscript explores the current state of play in Poland’s unconventional gas and oil development.
Impact estimates for static spatial panel data models in R
Working Paper 2013-05
View Paper (pp. 10, 411 KB)
Abstract: In the present note we demonstrate how to implement the Lee and Yu (2010) procedure for fixed effects spatial panel data models available from the R (R Development Core Team 2012) package splm (Millo and Piras 2012). Additionally, we also show how to compute the impact estimates introduced by Kelejian, Tavlas, and Hondroyiannis (2006) and formalized in LeSage and Pace (2009). Unlike Matlab (MATLAB 2011), there was no R function specific to static panel data models for the calculation of the impact measures. After receiving numerous requests from the users of splm, we decided to extend the cross sectional functions available from spdep (Bivand 2013) to spatial panel data models.
Can Spatial Dependence Enhance Industry Sustainability? The Case of Pasture-Based Beef
Inocencio Rodriguez, Gerard D’Souza, and Thomas Griggs
Working Paper 2013-04
View Paper (pp. 23, 737 KB)
Abstract: Can sustainability be enhanced by maximizing the sum of private and social benefits from an industry? This might take place, for example, by identifying production options that increase profitability side-by-side with societal goals such as renewable energy production and carbon sequestration, healthier communities, environmental quality, and economic development. We explore this issue for pasture based beef (PBB), a nascent industry where industry profitability, community development, and quality of life can be enhanced by explicitly linking the PBB supply chain spatially and intertemporally, thereby increasing the sum of private and social benefits. We develop a framework based on optimal control theory that integrates a spatial component in which the production of PBB and alternative energy production as well as greenhouse gas emission reduction enhances private as well as social wealth. This model provides a basic foundation for developing agglomeration economies in a spatially dependent industry in which other locations are able to supply resources to given locations as a way of improving regional economic and environmental conditions. The framework is subsequently employed to identify possible industry conditions and configurations that demonstrate how profits, economic development, and environmental improvement can be created through increased pasture-beef production in a region where economic activities across locations play a crucial role across the spatial domain. Of course, the intensification of benefits derived from the agglomeration economies require coordination and cooperation among the key players within the impacted region.
A J-test for Panel Models with Fixed Effects, Spatial and Time
Harry H. Kelejian and Gianfranco Piras
Working Paper 2013-03
View Paper (pp. 42, 529 KB)
Abstract: In this paper we suggest a J-test in a spatial panel framework of a null model against one or more alternatives. The null model we consider has fixed effects, along with spatial and time dependence. The alternatives can have either fixed or random effects. We implement our procedure to test the specifications of a demand for cigarette model. We find that the most appropriate specification is one that contains the average price of cigarettes in neighboring states, as well as the spatial lag of the dependent variable. Along with formal large sample results, we also give small sample Monte Carlo results. Our large samples results are based on the assumption N → ∞ and T is fixed. Our Monte Carlo results suggest that our proposed J-test has good power, and proper size even for small to moderately sized samples.
Estimation of Spatial Models with Endogenous Weighting Matrices and an Application to a Demand Model for Cigarettes
Harry H. Kelejian and Gianfranco Piras
View Paper (pp. 29, 304 KB)
Abstract: Weighting matrices are typically assumed to be exogenous. However, in many cases this exogeneity assumption may not be reasonable. In these cases, typical model specifications and corresponding estimation procedures will no longer be valid. In this paper we specify a spatial panel data model which contains a spatially lagged dependent variable in terms of an endogenous weighting matrix. We suggest an estimator for the regression parameters, and demonstrate its consistency and asymptotic normality. We also suggest an estimator for the large sample variance-covariance matrix of that distribution. We then apply our results to an interstate panel data cigarette demand model which contains an endogenous weighting matrix. Among other things, our results suggest that, if properly accounted for, the bootlegging effect of buyers, or “agents” for them, crossing state borders to purchase cigarette turns out to be positive and significant.
Comparing Implementations of Estimation Methods for Spatial Econometrics
Roger Bivand and Gianfranco Piras
Working Paper 2013-01
View Paper (pp. 38, 869 KB)
Abstract: Recent advances in the implementation of spatial econometrics model estimation techniques have made it desirable to compare results, which should correspond between implementations across software applications for the same data. These model estimation techniques are associated with methods for estimating impacts (emanating effects), which are also presented and compared. This review constitutes an up to date comparison of generalized method of moments (GMM) and maximum likelihood (ML) implementations now available. The comparison uses the cross sectional US county data set provided by Drukker, Prucha, and Raciborski (2011c, pp. 6-7). The comparisons will be cast in the context of alternatives using the MATLAB Spatial Econometrics toolbox, Stata, Python with PySAL (GMM) and R packages including sped, sphet and McSpatial.
A Knowledge Base for the World’s Energy Rich Regions
Hodjat Ghadimi and Davina Bird
Working Paper 2012-07
View Paper ( 18 pp., 524 KB)
Abstract: Energy rich regions (ERRs) play an important role in the world economy. A knowledge base of energy rich economies on a regional level provides a useful tool for comparative research of sustainable development in ERRs with an interdisciplinary perspective. The purpose of this knowledge base is to present a foundation for understanding the attributes and development processes of various ERRs and the collective role they play in the world’s energy, environment, and development debate. The construction of the ERR knowledge base is described, including the steps and data sources, structure, and process. Using two databases on oil and gas giant fields and megaprojects, this article demonstrates preliminary observations and illustrations about the nature and characteristics of ERRs. This research will assist in formulating and addressing interesting questions for future qualitative and quantitative studies.
Computational Structure for Linking Life Cycle Assessment and Input-Output Modeling: A Case Study on Urban Recycling and Remanufacturing
J Cooper, RW Jackson, NG Leigh
Published in Giarattani F, G Hewings and P McCann. (eds.) Handbook of Economic Geography and Industry Studies, Edward Elgar: Cheltenham. 2013.
Abstract: Recent models of sustainable industrial system growth show an increased interest in changing materials flows in urban and rural landscapes and populations. Within this context, “changing materials flows” means introducing new commodity uses and sources or ending existing ones and introducing new waste treatments into the environment or placing a moratorium on them. There are many exaples that illustrate this trend, such as using field crops for biofuels production instead of food production and recycling waste materials to retain their value. A framework for modeling and assessing the impact of materials flows to advance the mutual goals of sustainable industrial, urban, and rural systems is explored here through an urban setting case study. The environmental impact and economic benefits of these flows occur at different spatial levels and scales, from the individual urban tact to international trade and the global environment. This requires developing and using models that can capture, quantify and qualify materials and flows across these different scales to comprehensively assess their impacts. Our case study investigates extracting or “mining” specific products and their associated materials from metropolitan regions through new recycling and remanufacturing networks and facilities in an urban region. It then examines formalizing methods for modeling the economic development and environmental effects of different material flow scenarios on these regions. The concepts presented are intended to be generally applicable to a wide range of emerging and existing economic systems and situations.
An Analysis of Administrative “Best Practices” in the Administration of Business Incubators
M Middleton, PV Schaeffer, RW Jackson
Working Paper 2012-05
View Paper 2012-05 (pp.20, 759KB)
Abstract: A large body of scholarly work has been published on “best practices” in the administration of business incubators. These strategies for the operation of the facilities outline ideal administrative policies and procedures that are not always practical for the operation of all business incubators. Using data acquired from a nationwide survey of business incubators this paper investigates the use of “best practices” identified by scholars in the management of operating business incubators. This research uses frequency analysis and cross tabulation to analyze the “best practices” variables of the survey. The analysis illustrates compliance and use of these “best practices is not uniform in the administration of business incubators. Compliance with these administrative “best practices” is selective. There are variances in the utilization of each of the policies and procedures set forth by “best practices” for administration of business incubators. These variances are reflected in not only practices of each incubator but there are also variances in compliance by size of the community.
Regional Science Reconsidered
PV Schaeffer, RW Jackson and JO Bukenya
Printed in The Review of Regional Studies, 41:161-177, 2012.
Abstract: Members of a discipline share common research questions, values they use to address normative issues, and a set of research methods. Collectively, the features of a discipline that are common to all of its members constitute its core. Disciplines – and their specializations – can also be defined by their boundaries. However, in the case of regional science, the boundaries are fuzzy. Because regional science has been influenced by economics, geography, urban and regional planning, sociology, political science, public administration, and transportation engineering, it overlaps to a significant degree with these “parent disciplines” so that clear cut boundaries do not exist. This article explores the core and, to a lesser degree, boundaries of regional science. No definition of a discipline should be considered final because its boundaries and core are subject to change. Because of this, it is necessary from time to time to re-examine our discipline. Just as disciplinary cores and boundaries are dynamic, so too are the pressing needs of the societies that research supports. Ideally, disciplinary shifts occur in response to societal needs, in ways that underscore rather than undermine disciplinary relevance. Therefore, the backdrop of societal relevance provides the context for our reconsideration of regional science’s core and boundaries.
Metro and Non-Metro business Incubators: Similarities and Critical Differences
RW Jackson, PV Schaeffer, M Middleton
Working Paper 2012-03
View Paper (pp. 20, 687KB)
Abstract: Business incubators often figure prominently into regional economic development and innovation strategies. This paper reports on a recent survey aimed at identifying appropriate methods for the evaluation of nonmetropolitan, rural incubator performance. The results draw upon responses from 209 of 719 active U.S. Business incubators identified through our research. Roughly one quarter of the respondents were located outside of areas classified as metropolitan. This paper focuses on critical similarities and differences between metropolitan and non-metropolitan business incubators along the dimensions of economic role, function, and effectiveness. The survey and preliminary synthesis of follow-up interviews suggests that an explicit awareness of the functional differences between business incubators in nonmetropolitan regions might enhance their potential for success.
Economic Base Multipliers: A Comparison of ACDS and IMPLAN
GF Mulligan, University of Arizona; RW Jackson, RRI Director, West Virginia University; and A Krugh, USDA Rural Development
Printed in Regional Science Policy & Practice, 5, 289-303.
Abstract: Local and regional practitioners commonly use the economic (export) base multiplier in project assessments. However, dependable estimates of the regional multiplier require that the division of total activity into its export (basic) and local (nonbasic) components be accurate across all industries – especially in the dominant ones. This paper compares the activity divisions that are generated by a shortcut approach, calibrated by the Arizona Community Data Set, with those generated by the widely used IMPLAN input-output model. the comparison is made over 577 micropolitan U.S. countries (all are nonmetropolitan) in the year 2000. Although the two approaches are methodologically dissimilar they generate comparable estimates of economic base multipliers. Moreover, other important regional attributes, like human capital and specialization, affect the alternative multiplier estimates in a similar way.
Input-Output Analysis: New Technologies and Extended Time Horizons
Randall W. Jackson and Christa D. Jensen
Working Paper 2012-01 (Revised from working paper 2011-10)
Abstract: Input-output analysts are often confronted with requests for impacts assessments for economic shocks that stretch uncomfortably the assumptions of standard input-output modeling. this paper presents an approach to confronting a subset of these challenges straightforwardly in a way that ameliorates some of the more restrictive input-output assumptions, maintains the inter-industry detail of the input-output model, and enhances the representation of certain economic behaviors without the additional complexities of moving the more complex CGE or conjoined econometric input-output models. We conclude with the observation that direct changes to the IO framework most often necessitate further modifications requiring additional behavioral assumptions and decisions on the part of the modeler.
Knowns, Unknowns, and Impacts
Published in Review of Regional Studies. Volume 41, pages 5-11.
Abstract: Jouke van Dijk opened the most recent issue of Papers in Regional Science with “Long lasting knowledge in Regional Science,” an editorial highlighting the role that the Association’s journal has played in documenting much of the key regional science research since its inception. Publications obviously provide a long lasting chronicle of research in regional science, but I had rather hoped to find in his editorial an actual identification and enumeration of examples of specific long lasting knowledge gleaned from the regional science record. My hopes stemmed from having spent the past year contemplating appropriate content for this Presidential Address on the occasion of our own 50th Anniversary of the Southern Regional Science Association, which itself seemed to be a appropriate time for reflection and contemplation. The choice had narrowed to three related questions. 1. What do we know? 2. What do we want to know? 3. Do we make a difference? I will offer a set of axioms that I believe underlie a wide range of regional science knowledge, identify a set of unknowns that flow from them, and content that for any of what we know to have an impact, to be meaningfully long lasting, its relevance must be actively extended beyond the boundaries of the regional science community. Only then will our knowledge have made a difference. Citing a prominent example of recent national policy directions, I contend that the opportunity to demonstrate regional science relevance has never been greater, and conclude by calling for us to do so.
A Note on Partitioning Effects Estimates Over Space
Christa D. Jensen and Donald J. Lacombe
Printed in Letters in Spatial and Resource Sciences. 5(1), pages 47-53. 2012
Abstract: In this paper we provide an applied example for calculating the so-called effects estimates of LeSage and Pace (2009) for partitions of the impacts over space. While the partitioning of the impacts by orders of neighbors over space for the spatial autoregressive (SAR) model is a relatively straightforward procedure, care must be taken in the case of the spatial Durbin model (SDM). We provide an illustration of these calculations for both models using a widely available data set on voter turnout for the 1980 United States presidential election.
Minimum Wages and Teen Employment: A Spatial Panel Approach
Charlene M. Kalenkoski and Donald J. Lacombe
Research Paper 2011-08
View Paper (pp. 19, 514 KB)
Abstract: The authors employ spatial econometric techniques and Annual Averages data from the U.S. Bureau of Labor Statistics for 1990-2004 to examine how changes in the minimum wage affect teen employment. Spatial econometric techniques account for the fact that employment is correlated across states. Such correlation may exist if a change in the minimum wage in a state affects employment not only in its own state but also in other, neighboring states. The authors show that state minimum wages negatively affect teen employment to a larger degree than is found in studies that do not account for this correlation. Their results show a combined direct and indirect effect of minimum wages on teen employment to be -2.1% for a 10% increase in the real effective minimum wage. Ignoring spatial correlation underestimates the magnitude of the effect of minimum wages on teen employment.
Simulating Impacts on Regional Economies: A Modelling Alternative
Guy R. West and Randall W. Jackson
Published in IGI Global. (http://www.igi-global.com/chapter/simulating-impacts-on-regional-economies/79697)
Abstract: Practitioners and academics apply a range of regional economic models for impacts assessment, each of which has its own strengths and weaknesses. This paper presents a model for simulating impacts on regional economies (SIRE) that occupies an intermediate position between input-output (IO) and computable general equilibrium (CGE) models. With greater behavioural detail than the typical regional IO model, the SIRE model incorporates many features of CGE models without enforcing the strictly linear behavioural relationships of IO. Like most CGE models, the simulation framework presented here borrows a subset of parameters from an existing econometric model for the same region.
Regional CGE models are often criticised for lack of industry detail, lack of hard data, and relatively high model construction costs, while conventional input-output models are criticised for limiting assumptions. Since the household sector dominates multiplier effects in an input-output model, capturing marginal income and expenditure relationships for the household sector can provide a more realistic representation of the economic system and a departure from the strict linearity assumption. Further, since marginal income changes alter value added relationships, effects on regional output prices as well as import propotions also can be simulated. Unlike either the CGE or the conventional input-output model in which multiplier values are the same for all multiples of the initial shock, the multiplier values from the SIRE model vary with the size and distribution of the initial impact. Larger changes in final demand tend to be associated with smaller multipliers than small changes in final demand.
Social Benefits of Niche Agricultural Products: The Case of Pasture-Based Beef in Appalachia Part 1: The Conceptual Framework
Inocencio Rodriguez, Gerard D’Sousa, Alan Collins, and Tim Phipps
Research Paper 2011-06
View Paper (pp. 30, 624 KB)
Abstract: Niche agricultural products are growing in economic importance. This growth is driven mainly by the increased demand for more healthy, nutritious, fresh and locally grown food products. There is obviously a potential increase in private benefits to producers/landowners as a result of increased production of the underlying crops to satisfy this demand. What is less obvious is the potential to also generate increased social benefits, particularly as they relate to energy conservation, alternative energy or biogas development and carbon sequestration. In other words, calories and kilo-calories are becoming more linked. The objective of this analysis is to develop a conceptual framework to illustrate the linkages among production at the local level, farm-level profitability and regional economic and environmental benefits. Using an optimal control approach, we apply this framework to the case of pasture-basedd beef (PBB) in Appalachia. PBB is an alternative to conventional, grain-based beef production. The idea is to determine to what extent a transition to PBB would enhance farm-level profitability while enabling surrounding communities to benefit from higher quality food products, environmental improvement, economic development and, ultimately, quality of life. We expect the results to illustrate under what combination of market and policy outcomes it is optimal – from both private and social perspectives – for a given PBB farmer to switch between cattle farming, energy farming and carbon farming. This paper is the first in a three-part series, with subsequent papers devoted to: (a) integrating spatial effects into the model, and (b) model estimation and use in policy formulation. The overall effort is part of a larger, interdisciplinary multi-institutional research project funded by USDA, ARA, focusing on the development of sustainable PBB operations for Appalachia.
An Analysis of the Role of Self-employment in the Economic Development of the Rural Northeastern United States
Saima Bashir, Tesfa Gebremedhin and Jerald J. Fletcher
Research Paper 2011-05
View Paper (pp. 24, 448 KB)
Abstract: Generating employment and alleviating poverty are the biggest challenges for regional economic growth in rural areas of the Northeastern United States. Despite the revival of the economy in much of the nation’s heartland, rural areas are still suffering from high poverty and unemployment rates. Self-employment, a measure of entrepreneurship, indicates an opportunity for rural communities to improve quality of life and accelerate regional economic development. Taking into consideration the problem of unemployment in rural communities, there is a need to focus on generating self-employment opportunities at micro level to enhance economic growth and reduce the per capita income ‘gap’ between rural and urban areas. The overall objective of the study is to identify and estimate the impacts of self-employment in the economic development of the Northeastern United States. The empirical model of this study is derived from the three-equation simultaneous model of Deller et al., (2011). The study estimated the relationship of employment, population and per capita income to self-employment. Research findings show that employment and population have a positive relationship to self-employment indicating positive contribution of self-employment to regional economic development.
Telecommunications Investment and Economic Development: Evidence from a Panel of Sub-Saharan Africa (SSA)
Chali Nondo and Mulugeta Kahsai
Research Paper 2011-04
view paper (pp. 17, 477 KB)
Abstract: The objective of this paper is to study the role of government effectiveness, institutional and political factors in aggregate output and telecommunications penetration in SSA countries. The contribution of these factors in aggregate output and telecommunications evolution is examined using a framework that accounts for the endogeneity and interactions between aggregate output and telephone penetration rates. Results from the study indicate that government effectiveness is an important determinant for aggregate output. Another supplemental finding is that the incessant political upheavals in SSA countries have a detrimental effect on aggregate output. From this, we endorse that SSA countries should design and implement efficient institutional frameworks and mechanisms that will expand telecommunications network infrastructure in both rural and urban areas and thus spur growth and development.
The Role of Institutional Quality in FDI Inflows in Sub-Saharan Africa
Mulugeta S. Kahsai, Yohannes G. Hailu, Chali Nondo, and Peter V. Schaeffer
Research Paper 2011-03
View Paper 2011-03 (pp. 22, 334 KB)
Abstract: During the period 2000 to 2008, Africa’s collective GDP grew at an annual rate of 4.9 percent. Even though previous studies argue that strengthened and improved institutional quality is key determinant for attracting foreign direct investment to Africa, we find no evidence to that effect. Using a panel data for 45 Sub-Saharan African countries (SSH), we estimate the role of institutional quality (governance) in attracting FDI inflow during the 1996-2007 period. After controlling for country and time specific effects and the economic environment of the host country, we find no significant evidence of the impact of institutional quality on FDI inflow in our analysis. This finding may suggest that FDI inflow to SSH is potentially motivated by the abundance of raw materials and natural resources than good governance.
An Analysis of the Relationship between New Firm Formation and Economic Development in the Northeast Region of the United States
Saima Bashir and Tesfa Gebremedhin
Research Paper 2011-02
View Paper 2011-02 (pp. 29, 380 KB)
Abstract: The overall objective of this study is to provide policy makers with information on the role of new firm formation in the economic development in the Northeast region of the United States. This study identifies and estimates the impacts of new firm formation in the economic development of the Northeast region. The empirical model of this study is derived from the three-equation simultaneous model of Deller et al. (2001). In this study, Three Stage Least Squares (3SLS) method is used to estimate the simultaneous equations model. The research findings indicate that population density and per capita income have a positive link with new firm formation. Higher population density and per capita income encourage entrepreneurs to start new firms in the region. This leads to an increase of new jobs, which is a positive contribution to economic development in the Northeast region.
Accounting foundations for interregional commodity-by-industry input-output models
Randall W. Jackson and Walter R. Schwarm
Published in Letters in Spatial and Resource Sciences. 4:3:187-196.
Abstract: Several procedures for generating interregional commodity flow matrices have been developed in the U.S. in recent years (see, e.g., Canning and Wang 2005, Jackson et al. 2006, Lindall, Olsen and Alward 2006). Despite the fact that these methods derive from the commodity-by-industry framework, very little attention has been given recently to the fundamental conceptual issues that must be confronted to generate a consistently defined interregional model or to conduct an interregional impacts assessment using an appropriate interregional framework. This paper revives the focus on interregional modeling issues initiated by Oosterhaven (1984), identifies and elaborates on these and additional issues, and traces the development of the accounting foundations from single-region inter-industry through interregional commodity-by-industry accounts. Its contribution lies in the provision of a high-level perspective on these frameworks that in the process both clarifies and simplifies key conceptual issues and operational decisions.
Fayette County, WV Case Study: A Look at the Movement towards Energy and Water Efficiency
Davina Bird, Hodjat Ghadimi, and Randall Jackson
Research Paper #2010-19
view paper (pp. 36, 1032KB)
Abstract: The focal area for this study is Fayette County, West Virginia. Using a qualitative semi-structured interview process, information was gathered so as to present a clear overview of what both the private and public sector are doing with regard to energy and/or water efficiency within the county. Given the pervasive nature of the issue of efficiency, interviewees were encouraged to describe their agency or organizational efforts as it relates to what they thought “energy and/or water efficiency” entailed. On the basis of the twenty-one interviews conducted, the progress being undertaken by different entities was noted and divided under five themes (e.g., capability building, infrastructure, events, reduced cost, and education). This idea of theme is then integrally tied to the main idea, message, or objective of a given activity. This framework is useful in order to show the general entity’s (e.g. community, government, not-for-profit, or for-profit) pattern of activity. Similar to entity activities being organized according to a related theme, challenges to the various entities are categorized for ease of dissemination. These categories encourage analysis and understanding of whether there are challenges that are in common between entities as well as what may be a particularly troublesome category for an entity and may need more attention focused on that category so as to lessen the challenges. The case study then summarizes the opportunities and challenges present in Fayette County with regard to their potential applicability to other municipalities in Appalachia.
Sustainable economic development in energy rich economies: A regional approach
Research Paper #2010-18
View Paper 2010-18 (pp. 16, 393 KB)
Abstract:There is an extensive literature on or relating to development issues of energy rich economies – particularly those in the developing world. While national-level studies abound, the analyses of these economies at a regional level or with a regional and spatial perspective are scarce. Generally, a bottom up regional approach to development and the value of insights that regional models and comparative regional studies provide have not received sufficient attention in the field of development economics. Analyzing development sustainability in energy rich economies at a regional scale may provide insights not otherwise possible. National scale studies and models are mostly sectoral and generally ignore interesting development issues arising from spatial organization of production, distribution of physical and human capital over space, and spatial factors affecting the diversification of capital base. These studies mostly focus on developing economies while a regional perspective can cut across all energy rich economies in both the developing and developed world. A regional perspective can open doors to contributions from multidisciplinary spatial scientists from a wide range of fields including geography, planning, regional science and regional economics. Finally, using sub-national regions as units of analysis provides a richer picture of development at the national level and can shed light on important issues dealing with global sustainable development. In this paper we discuss why ‘region’ may provide a more flexible unit of analysis for energy rich economies; present a general development framework based on constancy of total capital stock; and outline a comprehensive knowledge base for energy rich regions that can be used to derive patterns of development, do comparative studies, and address some geo-economic and geopolitical issues that are integral to the world energy system.
National and State Economic Impact of NETL
Randall Jackson, Amanda Krugh, Brian LaShier, and Ronald Munson
Research Paper #2010-17
View Paper at: netl.doe.gov/research/energy-analysis/publications/details?pub=bb67464e-2e84-4037-b29e-5c826a755a9b
Abstract:This report documents the development of state-level input-output models for Pennsylvania, West Virginia, and Oregon and the augmentation of the national input-output model that was developed previously for the project Valuing Domestically Produced Natural Gas and Oil . The state IO models were developed to assess the FY08 economic impacts of expenditures, employment, and research and development awards at the NETL sites located in Pittsburgh, PA; Morgantown, WV; and Albany, OR. The national IO model was developed to assess the FY08 economic impacts of NETL site expenditures, awards, and employment at the national level.
Who Generates Hazardous Wastes? Attribution of Producer and Consumer Responsibility within the US
Christa D. Jensen
Research Paper #2010-16
view paper (pp.28, 832KB)
Abstract:Amid changing attitudes about the environment and increasing sustainability concerns, many countries around the world aim to curb waste generation, especially the generation of hazardous wastes. Beginning in the late 1970’s and occurring increasingly since, governments and international bodies are passing legislation and treaties dealing with the reduction of hazardous waste generation and waste minimization in general. For future waste minimization policies to have an impact on hazardous waste generation, methods for determining where the ultimate responsibility for hazardous waste generation lies need to be explored. This paper examines hazardous waste generation in the United States at the industry level and uses two different specifications of the commodity by industry input-output framework to conduct attribution analyses. These analyses allow for the determination of direct and indirect responsibility of both industries and final consumers for hazardous waste generation. An industry level analysis shows that only a few industries are responsible for a majority of hazardous waste generated in the US. Both attribution analyses suggest that in general, household consumption is largely responsible for direct and indirect hazardous waste generation. Looking more closely, there are noticeable differences in final demand attribution across industries. These results can be used by policymakers to inform and fashion rational and effective laws according to more specific objectives aimed at minimizing hazardous waste generation in the United States.
A Spatial Analysis of Poverty and Income Inequality in the Appalachian Region
Sudiksha Joshi and Tesfa G. Gebremedhin
Research Paper #2010-15
View Paper 2010-15 (pp.19, 568KB)
Abstract:The Appalachian Region has made progress in the various measures of development but still lags behind other national counterparts. Understanding the relationship between poverty and income inequality is important to evaluate how a development strategy would benefit the region. This paper presents a spatial simultaneous equations approach to determine the relationship between poverty and income inequality. Cross sectional county level data from 1990 and 2000 for the 420 counties in the Appalachian Region are used to examine the determinants of poverty and income inequality. The empirical results suggest that poverty and income inequality are inversely related. If the policy objective is to alleviate poverty, then considering reducing income inequality at the same time, may prove to render ineffective conclusions. The result findings also suggest that the income inequality in the Appalachian Region may actually contribute to its economic growth and to poverty reduction in the Region.
Regional Innovation Clusters: A Critical Review
Junbo Yu, and Randall W. Jackson
Published in Growth and Change, Vol. 42, No. 2 (June 2011), pp. 111-124
Abstract:This paper begins by investigating the Obama administration’s rationale of promoting regional innovation clusters (RICs) in the context of increasing public concerns on the Strategy for American Innovation. Next, the connections between RICs and existing research and policies in clusters, innovation and regional economic development are identified and analyzed to highlight those most critical challenges in conceptualizing and theorizing RICs. While we applaud the long overdue focus of economic development policies on subnational regions we identify several major difficulties associated with the development of empirics for promoting RICs and informing policymakers with practitioner-accessible tools and metrics before concluding.
An Empirical Analysis of the Interactions Between Environmental Regulations and Economic Growth
Chali Nondo, Peter V. Schaeffer,Tesfa G. Gebremedhin, and Jerald J. Fletcher
Research Paper #2010-13
view paper (pp.30, 457KB)
Abstract: The purpose of this research is to examine the relationship between environmental regulation and economic growth. A four-equation regional growth model is used to analyze the simultaneous relationships among changes in population, employment, per capita income, and environmental regulations for the 410 counties in Appalachia. Our results reveal that initial conditions for environmental regulation are negatively related to regional growth factors of change in population, per capita income, and total employment. From this, we infer that the diversion of resources from production and investment activities to pollution abatement is inadvertently transmitted to other sectors of the economy—thereby resulting in a slow-down of regional growth. We also find robust evidence that show that changes in environmental regulations positively influence changes in population, total employment, and per capita income. Thus, we parsimoniously conclude that in the long-run, environmental regulations are not detrimental to economic growth.
A Dynamic Shift Share Analysis of Economic Growth in West Virginia
Janaranjana Herath, Tesfa G. Gebremedhin and Blessing M. Maumbe
Research Paper #2010-12
View Paper 2010-12 (pp. 23, 400KB)
Abstract: A regional economy consists of industries with a variety of economic potentials. A growth or decline in any of these sectors affects the overall growth of the economy. Analysis of economic growth by sector of a particular region helps policy makers, community leaders and researchers in better decision making and problem solving. This study attempts to analyze the employment growth pattern and policy implications in the economic development of West Virginia using a dynamic shift share analysis. The study uses employment data for 38 years from 1970 to 2007 for the empirical analysis. Results indicate that agriculture, mining and manufacturing are no longer the backbone of the economy of West Virginia. The three sectors showed employment declined within the 38-year period. Service and financial insurance and real estate are the most robust sectors contributing 91 percent of employment growth from 1970 to 2007. Apart from these two sectors, the wholesale and retail and construction sectors showed positive economic growth. Identification of investment priorities within these potential sectors and implementation of a comprehensive regional development policy plan would definitely accelerate the economic growth of West Virginia.
What Causes Waste Flows? An Interregional Analysis of Welsh Waste Shipments
Christa D. Jensen, and Stuart McIntyre
Research Paper #2010-11
view paper (pp. 26, 223KB)
Abstract: Much of the waste flow literature focuses on international waste trade and oftentimes solely on trade in hazardous wastes. However, data is often available for waste flows within national borders and these flows could yield just as much information on the relationships that exist between origins and destinations. In a world where waste creation, transport, and disposal is becoming a global problem, understanding and modeling these flows is becoming increasingly important. This paper uses a gravity model approach and data on commercial waste shipments between local authorities within Wales to examine the characteristics that are responsible for origin-destination waste flow relationships. We focus on economic characteristics, as well as socioeconomic and demographic characteristics that may play a role in interregional Welsh waste trade.
Geography of Business Incubator Formation in the United States
Junbo Yu, Mark Middleton, and Randall Jackson
Research Paper #2010-10
View Paper 2010-10 (pp. 40, 741KB)
Abstract: The geography of business incubators has seldom been examined against the public aspirations and beliefs that incubators should either inhabit economically distressed areas to alleviate unemployment and poverty (in the case of empowerment business incubators) or proliferate in technologically capable regions to adequately unleash and exploit local high-technology potentials (in the case of technology business incubators). In this paper, the geographic distribution of 719 U.S. business incubators, which are located in 465 out of the 3,141 counties, is examined drawing upon a newly built incubator population database. In addition, the location factors underlying the formation of business incubators are also identified and analyzed, which leads to the discovery of a dichotomy between rural and urban incubators in their locational determinants.
A Spatial Analysis of Amenity and Regional Economic Growth in Northeast Region
Mulugeta S. Kahsai, Tesfa G. Gebremedhin, and Peter V. Schaeffer
Published in Review of Urban and Regional Development Studies, 23(2/3), pp 77-93. 2011.
Abstract: Amenities are expected to impact regional economic growth by affecting growth in population, employment, income, and house values. This study assess whether the 299 counties in the Northeast (NE) region of the US can build and pursue a growth strategy that depend on their local and neighborhood amenities (natural and built). It extends previous studies by estimating a simultaneous spatial Durbin model (SDM) using the two stages least square method. Historical and cultural amenities and water based recreational amenities are found to play a positive role in shaping the growth of population in the northeast region of the US. The role of natural amenities, land and winter based amenities is found to be negative or insignificant. One of the important findings of the study is the positive role of surrounding counties historical and cultural amenities in the growth of population and employment densities. Overall there is no evidence of a consistent and strong relationship between amenities and regional economic growth and the results can be termed as mixed and inconclusive.
A Spatial Analysis of Supplemental Nutrition Assistance Program and Economic Conditions in the Appalachian Region
Nyakundi M. Michieka, Archana Pradhan, and Tesfa G. Gebremedhin
Research Paper #2010-8
View Paper 2010-8 (pp. 22, 267KB)
Abstract: Supplemental Nutrition Assistance Program (SNAP) helps low income people and families buy food they need for good health. The main objective of this study is to examine the effects of changes in the economic conditions and welfare on SNAP participation in the Appalachian region. The study employs county level data to capture variation in SNAP participation. Spatial econometric models are developed to examine the relationship among the economic and business cycle conditions, changes in welfare reforms, demographic and household attributes, institutional factors, and SNAP participation. The findings from this study could be helpful in improving welfare programs in this region.
Does Level of Income Matter in the Energy Consumption and GDP Nexus: Evidence from Sub-Saharan African Countries
Mulugeta S. Kahsai, Chali Nondo, Peter V. Schaeffer, and Tesfa G. Gebremedhin
Published in Energy Economics, doi:10.1016/j.eneco.2011.06.006.
Abstract: This study tests the relationship between energy consumption and economic growth in Sub-Saharan African countries. The study uses a Panel Co-integration approach to test the causal relationship between energy consumption and GDP. Country-level time series data of energy consumption and economic growth are pooled and used to estimate the model. Sub-Saharan African countries in the sample are classified into low income and middle income countries. A Panel unit root test and panel co-integration is applied. The findings support the neutrality hypothesis in the short-run except for middle income countries and a strong causation running in both directions is found in the long-run. The different results for low and middle income countries provide evidence of the importance of level of income in the causal relationship. This study helps to explain the interdependence of energy consumption and economic growth in Sub-Saharan African Countries. Results are critical in formulating sustainable development policies that are geared to efficient allocation of resources in Africa which are expected to increase access to energy services in the region.
Toward the Geography of Business Incubator Formation in the United States
Junbo Yu, Mark Middleton, and Randall Jackson
Research Paper #2010-6
View Paper 2010-06 (pp. 29, 923KB )
Abstract: The geography of business incubators has seldom been examined against the public aspirations and beliefs that incubators should either inhabit economically distressed areas to alleviate unemployment and poverty (in the case of empowerment business incubators) or proliferate in technologically capable regions to adequately unleash and exploit local high-technology potentials (in the case of technology business incubators). In this paper, the geographic distribution of 719 U.S. business incubators, which are located in 465 out of the 3,141 counties, is examined drawing upon a newly built incubator population database. In addition, the location factors underlying the formation of business incubators are also identified and analyzed, which leads to the discovery of a dichotomy between rural and urban incubators in their locational determinants.
Incubation Push or Business Pull? Investigating the Geography of US Business Incubators
Haifeng Qian and Kingsley E. Haynes
(Huaqun Li, Mark Middleton, and Carl Turner collected and cleaned data)
Research Paper #2010-5
View Paper 2010-05 (pp. 24, 1,082KB)
Abstract: The primary purposes of this paper are to present the geographic distribution of US business incubators and to explore geographically bounded factors that influence the location of business incubators. Our data show that US business incubators are unevenly distributed across the urban/rural division, states, as well as counties. Factor analysis identifies three common factors from 27 demographic, social, and economic variables drawn from publicly available data at the county level. These factors include agglomeration, welfare, and business/entrepreneurship. The results of binominal logistic regressions suggest that incubators are more likely to be found in counties with high levels of agglomeration but low levels of existing business development. Our findings support the “incubation push” model over the “business pull” model on the location of business incubators, which reflects the policy strategy of incubator creation.
Methodological Challenges and Institutional Barriers in the Use of Experimental Method for the Evaluation of Business Incubators: Lessons from the US, EU and China
Junbo Yu and Peter Nijkamp
Research Paper #2010-4
View Paper (pp. 9, 170KB)
Abstract: Despite their worldwide adoption by policy makers as the Holy Grail for entrepreneurship and business development, the effectiveness of business incubation programs remain elusive, primarily plagued by untenable evaluation methods. This paper develops an in-depth analysis on those methodological and institutional factors that prohibit the use of theoretically sound solutions such as the Experimental Method in evaluation practice.
Time Dynamics and the Introduction of New Technologies within IO Analysis
Christa D. Jensen and Randall W. Jackson
Research Paper #2010-3
View Paper (pp. 37, 316KB)
Abstract: Although Input-Output (IO) models are widely accepted tools for regional scientists and economists alike, there are still many issues to confront during their application, including estimating impacts relative to future years, dynamic impacts, and the introduction of new technologies within economic systems. Oftentimes, especially within energy and environmental subject areas, applications call for not only the introduction of new technologies but also for forecasts of economic impacts that may take years, or even decades, to fully implement. Despite the static nature of the IO modeling framework, these types of situations can be handled successfully and in ways fully consistent with the principles underlying the framework. This paper describes such a methodology, developed in the context of an input-output application for the estimation of impacts associated with the introduction of new energy technologies over a twenty year time horizon, modeling new and existing fossil-fuel technology scenarios from inception through the year 2030. As a demonstration of the method, application results are presented and briefly discussed.
Obesity Prevention: A Review of the Interactions and Interventions, and some Policy Implications
Anura Amarasinghe and Gerard D’Souza
Research Paper #2010-2
View Paper (pp. 38, 201KB)
Abstract: Obesity is reaching epidemic proportions especially in the developed and, more recently, in the developing world where the problem is compounded by myriad socio-economic, demographic, built and natural environmental factors. This review examines the possible causes, consequences and policy implications using a multilevel, multispectral framework. The causes of obesity clearly are multifaceted and involve numerous interactions. Together with economic incentives, allocation of physical and financial resources to community intervention strategies through educational programs as well as better land use planning would be helpful in promoting healthier and sustainable communities. Towards this goal, we proposed a dynamic and integrated Individual, Social, Economic and Environmental Model (ISEEM) for obesity prevention. The use of an ISEEM framework, involving a strategic combinations of strategies and targeted to the specific circumstances of individual communities and localities could be helpful for obesity prevention in the years to come.
Energy Consumption and Economic Growth: Evidence from COMESA Countries
Chali Nondo, Mulugeta S. Kahsai and Peter V. Schaeffer
Research Paper #2010-1
view paper 2010-1 (pp. 20, 188KB)
Abstract: This study applies panel data techniques to investigate the long-run relationship between energy consumption and GDP for a panel of 19 African countries (COMESA) based on annual data for the period 1980-2005. In the first step, we examine the degree of integration between GDP and energy consumption and find that the variables are integrated of order one. In the second step, we investigate the long-run relationship between energy consumption and GDP; our results provide strong evidence that GDP and energy consumption move together in the long-run. In the third step, we estimate the long-run relationship and test for causality using panel-based error correction models and find a long-run bidirectional relationship between GDP and energy consumption. Further, our analyses reveal that causation runs from energy consumption to GDP for low income COMESA countries.
Who Creates Waste? Different Perspectives on Waste Attribution in a Regional Economy
Christa D. Jensen, Stuart McIntyre, Max Munday and Karen Turner
Research Paper #2009-9
View Paper 2009-9 (pp. 40, 370KB)
Abstract: We use a regional input output (IO) framework and data derived on waste generation by industry to examine regional accountability. In addition to estimating a series of industry waste-output coefficients, the paper considers a series of methods for waste attribution, and practical use for policymakers. The paper first considers perspectives on attribution of domestic waste generation using basic Type I and Type II industry multipliers, and also compares these with multipliers derived from a trade endogenised linear attribution system (TELAS) which permits a greater focus on private and public final consumption as the main exogenous driver of waste generation in the domestic economy. Second, it uses a domestic technology assumption (DTA) to consider what Wales’s ‘waste footprint’ would be if it had to meet all its consumption requirements through domestic production.
Evaluating the H-1B Visa Program: Theoretical Issues
Peter V. Schaeffer and Mulugeta Kahsai
Research Paper #2009-8
Published in China-USA Business Review 8:11, 44-54, 2009.
Abstract: The H-1B visa program is popular and controversial at the same time. It is supposed to serve U.S. interests by helping bring some of the most talented scientists and engineers (S&E) to this country. There is considerable dispute, however, whether the program is successful in this regard, or whether employers misuse it to undercut the salaries of citizens and green card holders who apply for the same positions. This paper sorts out some of the theoretical issues that complicate empirical analyses and which, if ignored, could produce misleading results.
Deconcentration, Counter-urbanization, or Trend Reversal? The Population Distribution of Switzerland, Revisited
Mulugeta Kahsai and Peter V. Schaeffer
Research Paper #2009-7
view paper 209-07 (pp. 25, 367KB)
Abstract:This study analyzes trends in the population distribution of Switzerland, with focus on the period 1980-2000. It updates and extends an earlier study (Schaeffer, 1992a). The extensions include analyses of population distribution trends by region and citizenship. Results show that Switzerland experienced deconcentration in the 1970s at the cantonal level, and in the 1980s and 1990s at the district level. The results also show a trend of moving away from large densely populated districts to small, sparsely populated and medium sized districts. There was a strong suburbanization trend starting the 1950s and counter-urbanization during 1980-2000. The core urban areas experienced the slowest growth at the end of the century. Although the foreign permanent resident population increased from 11.6% at the beginning of the century to 20.7% in 2005, its role in shaping the distribution pattern is low.
Linking Tourism Resources and Local Economic Benefits: A Spatial Analysis in West Virginia
Jinyang Deng and David Dyre
Research Paper #2009-6
View Paper 2009-06 (pp. 18, 360KB)
Abstract: Tourism has been playing an increasingly important role in the economic development and promotion for the state of West Virginia. However, how tourism resources are spatially distributed across all the state’s 55 counties has not received much attention. This study could be among the first in West Virginia to create a tourism resource inventory database at the county level, and to spatially examine tourism resource distribution patterns across all counties, based on the tourism resource quantity measured by size, length, or number, as well as on the quality determined by the Analytic Hierarchy Process (AHP) through surveys of 191 visitors. Based on the data collected, a four-level amenity index is created using the standard deviation method and mapped using GIS. The study indicates that nature-based tourism resources are largely concentrated in the eastern or central eastern part of West Virginia centering around Pocahontas County, while cultural resources do not exhibit a distinct clustering pattern. In addition, the cultural resource distribution pattern not only visually resembles that associated with visitors’ travel spending, but also has a statistically significant correlation with travel spending after controlling the spatial dependence. That being said, there is no such relationship that exists between natural tourism resources and travel spending, suggesting that more efforts are needed in the future to develop and market nature-based tourism in those counties with higher levels of natural tourism resources, but lower levels of visitor spending. It also implies that natural tourism is not a major contributor to the local economy for most counties. Rather, other forms of tourism activities such as gambling generated a large portion of travel/tourism related revenues, despite this contribution being only limited to a few counties.
Sustainable Economic Development in Energy Rich Economies: A Regional Approach
Research Paper #2009-5
View Paper 2009-05 (pp. 21, 170 KB)
Abstract: There is an extensive literature on or relating to development issues of energy rich economies – particularly those in the developing world. While national-level studies abound, the analyses of these economies at a regional scale or with a regional and spatial perspective are scarce. Generally, a bottom up regional approach to development and the value of insights that regional models and comparative regional studies provide have not received deserved attention in the field of development economics. Analyzing development sustainability in energy-based economies at a regional scale may provide insights not otherwise possible. National scale studies and models are mostly sectoral and ignore interesting development issues arising from spatial organization of production, distribution of physical and human capital over space, and spatial factors affecting the diversification of capital base. These studies mostly focus on developing economies while a regional perspective can cut across all energy rich economies in both the developing and developed world. A regional perspective can open doors to contributions from multidisciplinary spatial scientists from a wide range of fields including geography, planning, regional science and regional economics. Finally, using sub-national regions as units of analysis provides a richer picture of development at national scale and can shed light on important global sustainable development concerns. This paper outlines a general development framework based on constancy of total capital stock and outlines a comprehensive knowledge base for energy rich regions that can be used to derive patterns of development and can serve as a basis for qualitative and quantitative analyses of sustainable development in these regions within a global context.
A County-Level Assessment of Entrepreneurship and Economic Growth in Appalachia using Simultaneous Equations
Maribel N. Mojica, Tesfa G. Gebremedhin, and Peter V. Schaeffer
Research Paper #2009-4
View Paper 2009-04 (pp. 26, 179 KB)
Abstract: This study provides evidence of the contribution of entrepreneurship to economic development in Appalachia. Using data on Appalachian counties, a system of simultaneous equations is empirically estimated to measure the effects of entrepreneurship on economic growth and development. We present an expanded Carlino-Mills growth model using changes in population, employment, and per capita income to represent growth. The goal of the investigation is to increase the understanding of entrepreneurship’s contributions to economic growth, and its potential as a development strategy for a region, such as Appalachia, that is characterized by poverty and underdevelopment. The results show that start-up businesses contribute significantly to determining population growth. Employment growth is positively affected by self-employment rates as well as by firm formation rates.
Constructing a Baseline Input-Output Model with Environmental Accounts (IOEA)
Taelim Choi, Randall W. Jackson, and Nancey Green Leigh
Research Paper #2009-3
View Paper 2009-03 (pp. 25, 442 KB)
Abstract:This paper reports our efforts to develop a baseline input-output model with environmental accounts for use in developing geographically specific e-waste recycling systems. We addressed the conceptual and practical issues that occurred when the recyclable end-of-life commodities and related activities were incorporated in the traditional input-output model: 1) existing industry and commodity accounts do not represent recycling activities and recyclable end-of-life products explicitly; 2) flows of end-of-life products are mainly observed in physical volume; 3) the price of end-of-life products is not unique in their transactions in general. Because of these issues, transactions of end-of-life products are not easily incorporated within the input-output framework. We provide a way to record transactions of end-of-life products in both physical and monetary terms in the input-output model with environmental accounts. Particularly, we presented a case of e-waste recycling for the Atlanta Metropolitan Area with a hypothetical scenario.
An Empirical Analysis of the Link between Entrepreneurship and Economic Growth in West Virginia
Maribel N. Mojica, Tesfa G. Gebremedhin, and Peter V. Schaeffer
Research Paper #2009-2
View Paper 2009-02 (pp. 21, 192 KB)
Abstract: Entrepreneurship variables constructed from county-level proprietorship and firm birth data were included in an endogenous growth model to determine the relationship between entrepreneurship and economic growth in West Virginia. The empirical estimates using weighted least squares (WLS) and 2-stage least squares (2SLS) regressions generally show empirical evidence regarding the positive contribution of entrepreneurial activity to economic growth. Counties with more proprietors and business start ups exhibited higher growths in population and employment growth compared to less entrepreneurial counties. However, none of the entrepreneurship variables used in the study is statistically significant in determining per capita income growth.
Is Income Inequality Endogenous in Regional Growth?
Yohannes G. Hailu, Mulugeta S. Kahsai, Tesfa G. Gebremedhin, and Randall W. Jackson
Research Paper #2009-1
View Paper (pp. 20, 180 KB)
Abstract: This study focuses on testing the relationship between income inequality and growth within U.S. counties, and the channels through which such effects are observed. Based on a system of equations estimation, the empirical results confirm the hypotheses that income inequality has a growth dampening effect; income inequality is endogenous to regional growth and growth adjustment; and the channels through which income inequality determines growth are regional growth adjustments, such as migration and regional adjustment in job and income growth. Results have numerous policy implications to the extent that: (1) that income inequality is endogenous, its equilibrium level can be internally determined within a regional growth process; (2) traditional income inequality mitigating policies have indirect effect on overall regional growth, they may have unintended indirect effects on income inequality; and (3) regional growth adjustment also equilibrates income inequality, such forces can be utilized as policy instruments to mitigate income inequality, and its growth dampening effects hence forth.
Modeling Regional Recycling and Remanufacturing Processes: From Micro to Macro
Joyce Cooper, University of Washington; Randall Jackson, WVU; and
Nancey Green Leigh, Georgia Institute of Technology
Research Paper #2008-6
View Paper 2008-06 with Acrobat Reader (pp. 15, 370 KB)
Abstract: This paper reports progress in modeling recycling and remanufacturing processes within metropolitan regional economies at the micro and macro levels. The paper presents interim results from a multi-year, inter-institutional research project funded by the National Science Foundation. We identify a number of issues that have arisen from an in-depth industry level analysis of obsolete and waste products generated in the Seattle, WA and Atlanta, GA metro regions from waste electronics (e-waste) and carpet production and consumption. The two metro regions were selected for comparative analysis because Seattle is a recognized leader in e-waste recycling and sustainable development programs, while Atlanta has been slow to embrace recycling but is only 70 miles from the center of US carpet manufacturing (Dalton) and has an industry trade association that has set aggressive targets for carpet recycling and remanufacturing, e-waste forms the focus of this paper. We provide a detailed elaboration of processes at the micro-level, along with an enumeration of problems and solutions in characterizing these new industries, including an integration with environmental Life Cycle Assessment, and embedding the results in a macro-economic modeling framework.
An Alternative Futures Analysis for the Little Kanawha River Watershed in West Virginia
Vishakha Maskey, Michael P. Strager, and Charles B. Yuill
Research Paper #2008-5
View Paper with Acrobat Reader (pp. 10, 180 KB)
Abstract: The Little Kanawha River watershed in West Virginia has been identified to be one of fifteen watersheds in the United States that is projected to have the greatest amount of land conversion during the period from 2002 to 2030 ( Steinitz et al., 2005). The contributing factors for land conversion in the region are resource extraction and a disproportional population growth due to suburban sprawl. The outcome of land use change has an impact on water quality, terrestrial and aquatic habitat, and biodiversity. To measure and analyze this change, an alternative futures analysis was used in this study to model scenarios with Geographic Information Systems (GIS) and help guide future policies that are sustainable by balancing the environment and development in the Little Kanawha River Watershed. The major objective of this analysis was to map the likely dispersion or future growth patterns and the impact on water quality and biodiversity. The results indicate that water quality (total suspended solids) is impacted from current development patterns as is the biodiversity (bird community index) and will continue to degrade unless an integrated planning approach which considers preservation of large intact forested lands is implemented.
Recycling and Remanufacturing in Input-Output Models
Randall W. Jackson, Taelim Choi, and Nancey Green Leigh
Research Paper #2008-4
View Paper 2008-04 (pp. 10, 180 KB)
Abstract: Recycling and remanufacturing activities are gaining in importance, as a growing population and economy use up and wear out modern products, exhaust landfill capacity, threaten the environment, and discard potentially valuable and increasingly scarce resources. As an example, an estimated five billion pounds of carpet were sent to landfills in 2003 (CARE, 2003). Likewise, Americans discard computers, cell phones, LCDs and other electronic devices at an alarming rate. Estimates range from 100 to 250 million such items each year. As discard volumes rise and as resource scarcity becomes more critical, recycling, re-use, and remanufacturing have begun to take hold at ever more substantial scales. To understand the implications of these activities for economic development and sustainability, new methods of tracking their impacts must be developed. While at first blush it might be assumed that these activities could be modeled as could any other new industry, a number of characteristics peculiar to recycling and remanufacturing complicate the process. This paper enumerates a number of such dimensions of recycling, re-use, and remanufacturing, and lays out a scheme for extending the traditional approach.
Valuing Community Attributes in Rural Counties in West Virginia: An Application of Data Envelopment Analysis
Maribel N. Mojica, Tesfa Gebremedhin, and Peter Schaeffer
Research Paper #2008-3
View Paper 2008-03 (pp. 17, 180 KB)
Abstract: The study used Data Envelopment Analysis (DEA) to examine community attributes of rural counties in West Virginia using variables determining quality of life. This analysis was done to understand the value of the social and economic characteristics associated with different communities as migration patterns in the US are mostly attributed to community characteristics determining the residents’ valuation of the quality of life in an area. County level data was used to identify counties that are inefficient, measured in terms of socioeconomic factors. The data is composed of output variables representing desirable community attributes and input variables representing the undesirable characteristics. Analysis was done by using Data Envelopment Analysis to calculate efficiency scores among rural counties in the State as quantitative measures of the efficient production of quality of life within communities. The results show that the majority of the rural counties in the State lie on the efficiency frontier, while others are classified to be inefficient. The research findings are of interest to policy makers as indicators of community performance which can be used for evaluating counties in terms of quality of life.
Energy in a Resource-based Regional Economy: A Dynamic General Equilibrium Analysis
Research Paper #2008-2
View Paper 2008-02 (pp. 19, 65 KB)
Abstract: States and even local governments are increasingly realizing the need for long-term sustainable energy-environment planning as an integral part of their economic development program. These sub-national units are progressively playing a more active role in advancing policies for the reliability, environmental sustainability, and exploring the economic development impact of their energy resources and supplies. T his article outlines a modeling framework for an integrated analysis of the energy-environment-economy system in an energy resource-based region within a developed economy. The theoretical structure and mathematical skeletal of this dynamic optimal depletion computable general equilibrium model as the core of this modeling framework is presented in this paper. This model can be used to analyze complex economic development issues arising from energy-environment-economy interactions in regions enjoying an abundance of exhaustible fossil fuel resources.
Lung Cancer Mortality Is Elevated in Coal Mining Areas of Appalachia
Michael Hendryx, Kathryn O’Donnell, and Kimberly Horn
Research Paper #2008-1
View Paper 2008-01 (pp. 24, 113 KB)
Abstract: Previous research has documented increased lung cancer incidence and mortality in Appalachia. The current study tests whether residence in coal mining areas of Appalachia is a contributing factor. We conducted a national county-level analysis to identify contributions of smoking rates, socioeconomic variables, coal mining intensity and other variables to age-adjusted lung cancer mortality. Results demonstrate that lung cancer mortality for the years 2000-2004 is higher in areas of heavy Appalachian coal mining after adjustments for smoking, poverty, education, age, sex, race and other covariates. Higher mortality may be the result of exposure to environmental contaminates associated with the coal mining industry, although smoking and poverty are also contributing factors. The knowledge of the geographic areas within Appalachia where lung cancer mortality is higher can be used to target programmatic and policy interventions. The set of socioeconomic and health inequalities characteristic of coal mining areas of Appalachia highlights the need to develop more diverse, alternative local economies.
Modeling and Estimation Issues in Spatial Simultaneous Equations Models
Gebremeskel H. Gebremariam
Research Paper #2007-13
View Paper 2007-13 (pp. 43, 382 KB)
Abstract: Spatial dependence is one of the main problems in stochastic processes and can be caused by a variety of measurement problems that are associated with the arbitrary delineation of spatial units of observation (such as counties boundaries, census tracts), problems of spatial aggregation, and the presence of spatial externalities and spillover effects. The existence of spatial dependence would then mean that the observations contain less information than if there had been spatial independence. Consequently, hypothesis tests and the statistical properties for estimators in the standard econometric approach will not hold. Thus, in order to obtain approximately the same information as in the case of spatial independence, the spatial dependence needs to be explicitly quantified and modeled. Although advances in spatial econometrics provide researchers with new avenues to address regression problems that are associated with the existence of spatial dependence in regional data sets, most of the applications have, however, been in single-equation frame-works. Yet, for many economic problems there are both multiple endogenous variables and data on observations that interact across space. Therefore, researchers have been in the undesirable position of having to choose between modeling spatial interactions in a single equation frame-work, or using multiple equations but losing the advantage of a spatial econometric approach. In an attempt to address this undesirable position, this research work deals with the modeling and estimation issues in spatial simultaneous equations models. The first part discusses modeling issues in multi-equation Spatial Lag, Spatial Error, and Spatial Autoregressive Models in both cross sectional and panel data sets. Whereas, the second part deals with estimation issues in spatial simultaneous equations models in both cross sectional and panel data sets. Finally, issues related specification tests in spatial simultaneous equations models are discussed.
Issues in the Implementation of Interregional Commodity by Industry Input-Output Models
Randall W. Jackson and Walter R. Schwarm
Research Paper #2007-12
View Paper 2007-12 (pp. 16, 144 KB)
Abstract: A number of procedures for generating interregional commodity by industry accounts have been developed recently (Canning and Zhi, 2005; Robinson and Liu, 2006; Jackson et al, 2006; Lindall, Olsen and Alward 2006). While each approach shares a common organizational framework, very little attention has been devoted to the use of these accounts in impacts assessment application. This paper presents the common organizational framework for the data and introduces relevant issues by briefly reviewing its lineage. The paper then addresses a number of issues surrounding many-region modeling applications and demonstrates the implications of adopting different assumptions and approaches.
A Spatial Panel Simultaneous-Equations Model of Business Growth, Migration Behavior, Local Public Services and Household Income in Appalachia
Gebremeskel H. Gebremariam, Tesfa G. Gebremedhin, Peter V. Schaeffer,
Tim T. Phipps, and Randall W. Jackson
Research Paper #2007-11
Abstract: In this paper we develop a spatial panel simultaneous-equations model of business growth, migration behavior, local public services and median household income in a partial lag-adjustment growth-equilibrium framework and utilizing a one-way error component model for the disturbances. This model is an extension of the “jobs follow people or people follow jobs” literature and it improved previous models in the growth-equilibrium tradition by: (1) explicitly modeling local government and regional income in the growth process; (2) explicitly modeling gross in-migration and gross out-migration separately in order to spell out the differential effects, which used to be glossed over under net population change in previous studies; (3) explicitly incorporating both spatially lagged dependent variables and spatially lagged error terms to account for spatial spillover effects in the data set; and (4) extending and generalizing the modeling and estimation of simultaneous systems of spatially interrelated cross sectional equations into a panel data setting. To estimate the model, we develop a five-step new estimation strategy by generalizing the Generalized Spatial Three-Stage Least Squares (GS3SLS) approach outlined in Kelejian and Prucha (2004) into a panel data setting. The empirical implementation of the model uses county-level data from the 418 Appalachian counties for 1980-2000. Generally, the results from these model estimations are consistent with the theoretical expectations and empirical findings in the equilibrium growth literature and provide support to the basic hypotheses of this study. First, the estimates show the existence of feedback simultaneities among the endogenous variables of the model. Second, the results also show the existence of conditional convergence with respect to the respective endogenous variable of each equation of the model and the speed of adjustment parameters are generally comparable to those in literature. Third, the results from the parameter estimation of the model indicate the existence of spatial autoregressive lag effects and spatial cross-regressive lag effects with respect to the endogenous variables of the model. One of the key conclusions is that sector specific policies should be integrated and harmonized in order to give the desirable outcome. Besides, regionally focusing resources for development policy may yield greater returns than treating all locations the same.
An Empirical Analysis of Employment, Migration, Local Public Services and
Regional Income Growth in Appalachia
Gebremeskel H. Gebremariam, Tesfa G. Gebremedhin, Peter V. Schaeffer,
Randall W. Jackson, and Tim T. Phipps
Research Paper #2007-10
View Paper 2007-10 (pp. 50, 598 KB)
Abstract: This study develops a five-equation simultaneous system in a partial lag-adjustment growth-equilibrium framework. It improved previous models in the growth-equilibrium tradition by explicitly modeling local government and regional income in the growth process. It also explicitly modeled gross in-migration and gross out-migration separately in order to spell out the differential effects. The results show the existence of feedback simultaneities among the endogenous variables of the model. This finding is important from economic policy perspective because it indicates that sector specific policies should be integrated and harmonized in order to achieve the desirable outcome. Under this circumstance, looking at the direct plus indirect impacts of a change in a given policy is important.
A Spatial Model of Regional Variations in Business Growth in Appalachian States
Gebremeskel H. Gebremariam, Tesfa G. Gebremedhin, Peter V. Schaeffer,
Tim T. Phipps, and Randall W. Jackson
Research Paper #2007-09
View Paper 2007-9 (pp. 36, 166 KB)
Abstract: In this study, a spatial growth equilibrium model of business growth is developed and empirically estimated by Generalized Spatial Two-Stage Least Squares (GS2SLS) estimator using cross-sectional data from Appalachian States counties for 1990-2000. Beside the existence of spatial spillover effects, the results suggest that agglomerative effects that arise from both the demand and the supply sides were active in contributing to business growth in the study area during the study period. The policy implications of these findings are: (1) Regional cooperation of counties and communities is advisable and may even in fact be necessary to design appropriate policies that encourage business growth; and (2) Policy makers at the county level may need to design policies that can attract people with high endowment of human capital and higher income into their respective counties.
The Role of Institutions of Private Property Rights and Money in Entrepreneurial Discovery
Odd J. Stalebrink, John Sacco and Gerald Bushee
Research Paper #2007-8
View Paper 2007-8 (pp. 15, 56 KB)
Abstract:This paper examines the influence of private property rights and monies on entrepreneurial discovery. A framework is presented and tested, which views these two institutions as key determinants of entrepreneurial discovery. Using several measures as proxies for their influence, two variables, minimum wage legislation and percentage government employment, support the idea that private property rights and monies are associated with entrepreneurial discovery as indicated by business starts, failures, patents and bankruptcy.
Farmland Preservation Programs In West Virginia: A Preliminary Inquiry into the Merits of Purchase Development Rights
Odd J. Stalebrink and Samuel E. Wilkinson
Research Paper #2007-7
View Paper 2007-7 (pp. 13, 90 KB)
Abstract:To prevent the loss of farmland in West Virginia, the Voluntary Farmland Protection Act (VFPA) was passed in 2000. This act gives counties and the State authority to develop and fund local farmland protection programs, which typically involve a voluntary sale by a landowner of the right to develop the farmland. Following the purchase, the purchaser (often a government or a land trust) would retire the property. Since the inception of the VFPA, 5,000 acres of farmland have been retired in West Virginia. The objective of the paper is to assess the merit of this legislation in terms of its contribution toward its objective of preserving open space. The analysis is carried out at three levels, including the state, county and operational level. The state level analysis is conducted to assess the overall risk of eroding farmland in West Virginia. Aggregate statewide data will be used to determine this risk, including data on population density and state economic growth rates. A similar assessment is conducted at the county level to determine if development rights are more common in high growth counties (i.e., a micro level assessment). Finally, an analysis is conducted at the operational level to determine the operational efficiency the programs carried out under this legislation. The focus will be on the risk of misappropriation. Issues related to transparency and accountability in the distribution of funds swill be analyzed (how are decisions made, and how is accountability achieved). It is concluded that there seem to be, at the minimum, significant inroads for critical examination of the VFPA.
Re-scaling Household Strategies: Globalization and Livelihoods in Accra, Ghana
Ann M. Oberhauser and Kobena Hanson
Research Paper #2007-6
View Paper with Acrobat Reader (pp. 18, 4058 KB)
Abstract: This paper addresses livelihood diversification in the context of neo-liberal reforms through a case study of a rapidly urbanizing area in the capital city of Accra, Ghana. Existing literature on urban livelihoods suggests that adjustment policies and other neo-liberal reforms both impact and are affected by socioeconomic and material resources available to households. Our analysis seeks to examine the shifting nature of urban livelihood strategies in the face of increased integration into the global economy. This discussion will also explore how the intersections of gender, generation, and social positioning in society shape the patterns and/or outcomes of this livelihood diversification. The study provides background information and more detailed insight about how individuals, households, and communities make a living in the face of structural adjustment and neoliberal globalization in Ghana. Through a triangulation of quantitative and qualitative methods, the research provides in-depth analyses of people’s everyday lives as well as an overview of the broad processes affecting livelihoods in the context of globalization. The findings indicate how livelihood strategies in urban households relate to economic shifts at the national and international levels.
Global Impact of Energy Use in Middle East Oil Economies: A Modeling Framework for Analyzing Technology-Energy-Environment-Economy Chain
Research Paper #2007-5
View Paper 2007-05 (pp. 21, 240 KB)
Abstract:To explore choices of improving energy efficiency in energy-rich countries of the Middle East, this study lays out an integrated modeling framework for analyzing the technology-energy-environment-economy chain for the case of an energy exporting country. This framework consists of an input output process-flow model (IOPM) and a computable general equilibrium (CGE) model. The former investigates the micro-level production processes and sectoral interdependencies to show how alternative technologies affect the energy intensity of the economy (Lin, Polenske 1998 and Polenske, McMichael 2002). The latter belongs to the optimal depletion category of CGE models that analyzes energy economy interaction; it is an optimization model that solves the inter-temporal resource depletion problem subject to the workings of a multi-sector market economy, where relative prices play a crucial role (Ghadimi 1995, 2006). Such a formulation provides a systematic framework for analyzing the technology-energy-environment-economy chain in resource-rich developing countries. The main focus of this paper is to describe the theoretical structure of the class of CGE model proposed for this modeling framework.
Conditional Logit, IIA, and Alternatives for Estimating Models of Interstate Migration
Christiadi and Brian Cushing
Research Paper #2007-4
View Paper 2007-4 (pp. 28, 240 KB)
Abstract: Many researchers have used the conditional logit model to examine migration. One common objection to this model is that it carries the independence from irrelevant alternatives (IIA) assumption, which may be too restrictive. This study compares the conditional logit with models that partially relax (nested logit) or fully relax (mixed logit) the IIA assumption. We will begin to learn whether assuming IIA holds poses serious estimation problems for migration modeling. Given the substantial computational cost of the more complex models, a finding that a well-specified, but computationally much simpler, conditional logit model may suffice would be useful.
Modeling Small Business Growth, Migration Behavior, Local Public Services and Household Income in Appalachia: A Spatial Simultaneous Equations Approach
Gebremeskel H. Gebremariam
Research Paper #2007-3
View Paper 2007-03 (pp. 57, 288 KB)
Abstract: In this paper, a spatial simultaneous growth equilibrium model of small business growth, migration behavior, median household income and local public expenditures is developed. The model is empirically estimated by Generalized Spatial Three-Stage Least Squares estimator using count-level data from Appalachia for 1990-2000. The results suggest the existence of interdependence among the growth rates of small business, gross in-and out-migration, median household income and local public services in the form of feedback simultaneities, spatial autoregressive lag and spatial cross-regressive lag simultaneities. The findings also suggest the existence of conditional convergence with respect to endogenous variables of the model. The speeds of adjustment towards the steady states, however, are very slow which would cover many generations. The growth rate of median household income with a half–life time of about 9 years is the fastest and the growth rate of gross in-migration with a half-life time of about 180 years is the slowest to adjust. The findings also indicate the clustering of counties on the bases of their growth rates of median household incomes which would require the need for development policy coordination at the regional level, a region being defined as a group of counties, or the whole Appalachia. Another key finding of the study is also that Appalachian counties with higher initial population sizes were both destinations and sources of migrants during the study period.
Agricultural Land Development in the Northeast United States: A Spatial Simultaneous Growth Equilibrium Model
Yohannes G. Hailu and Cheryl Brown
Research Paper #2007-2
View Paper 2007-2 (pp. 35, 200 KB)
Abstract:This study introduces a spatial simultaneous growth model to examine the impact of regional growth on agricultural land development. County level data on growth factors, land values, farmland density and a set of exogenous variables are used from 12 Northeast states. Results indicate that regional growth, accessibility, and growth in neighboring counties may negatively impact agricultural land density. Farmland protection policies did not have a significant impact in reducing agricultural land development. Based on these results, cross-county and cross-state land use policy coordination may provide better land management outcomes than a county-level focus that disregards growth and land development interdependences.
Impacts of Regional Growth on Farmland Development in the Northeast U.S.
Yohannes G. Hailu and Cheryl Brown
Research Paper #2007-1
View Paper 2007-01 (pp. 30, 88 KB)
Abstract: This study models the relationship between regional growth and agricultural land development in the Northeast United States. A system of simultaneous equations is estimated using three-stage-least squares on county-level data. Results indicate that regional growth puts upward pressure on agricultural land values and downward pressure on the stock of agricultural land. Farm performance and some farmland protection policies were not effective in limiting farmland development.
The Impact of County Level Factors on Obesity in West Virginia
Anura Amarasinghe, Cheryl Brown, Gerard D’Souza, and Tatiana Borisova
Research Paper #2006-14
View Paper 2006-14 (pp. 28, 88 KB)
Abstract: A panel estimation of county prevalence of obesity indicates that while the percentage of the population with a completed college degree and the number of food stores available per thousand population are negatively and significantly correlated to county obesity rates, mean commuting time, average annual wage and the total number of business establishments per thousand population positively and significantly contribute to obesity. Educational attainment that raises both human and social capital, as well as changes in the built environment can play a vital role in controlling obesity in West Virginia (WV).
A Spatial Analysis of Obesity in West Virginia
Anura Amarasinghe, Gerard D’Souza, Cheryl Brown, and Tatiana Borisova
Research Paper #2006-13
View Paper 2006-13 (pp. 38, 2281 KB)
Abstract: A spatial panel data analysis at the county level examines how individual food consumption, recreational, and lifestyle choices ― against a backdrop of changing demographic, built environment, and policy factors ― leads to obesity. Results suggest that obesity tends to be spatially autocorrelated; in addition to hereditary factors and lifestyle choices, it is also caused by sprawl and lack of land use planning. Policy measures which stimulate educational attainment, poverty alleviation, and promotion of better land use planning and best consumption practices (BCPs) could both reduce obesity and result in sustainable development of regions where obesity is prevalent and the economy is lagging.
The Influence of Socioeconomic and Environmental Factors on Health and
Obesity in Rural Appalachia
Anura Amarasinghe, Gerard D’Souza, Cheryl Brown, and Hyungna Oh
Research Paper #2006-12
View Paper 2006-12 (pp. 33, 156 KB)
Abstract: A recursive system of ordered self assessed health (SAH) and a binary indicator of obesity were used to investigate the impact of socioeconomic and environmental factors on health and obesity in the predominantly rural Appalachian state of West Virginia. Behavioral Risk Factor Surveillance System (BRFSS) data together with county specific socioeconomic and built environment indicators were used in estimation. Results indicate that an individual’s risk of being obese increases at a decreasing rate with per capita income and age. Marginal impacts show that as the level of education attainment increases, the probability of being obese decreases by 3%. Physical inactivity increases the risk of being obese by 9%, while smoking reduces the risk of being obese by 14%. Fruit and vegetable consumption lowers the probability of being obese by 2%, while each hour increase in commuting time raises the probability of being obese by 2.4%. In addition, individuals living in economically distressed counties are less likely to have good health. Intervention measures which stimulate human capital development and better land use planning are essential policy elements to improving health and reducing the incidence of obesity in rural Appalachia.
An Optimal Depletion CGE Model: A Systematic Framework for Energy-Economy Analysis in Resource-based Economies
Research Paper #2006-11
View Paper 2006-11 (pp. 34, 105 KB)
Abstract: Numerical economic models of energy fall into two general categories: models analyzing within energy sector issues and models examining the interaction between the energy sector and the rest of the economy. The first category are mostly partial equilibrium models with a very detailed and disaggregated representation of the energy sector. Although very useful for sector planning purposes this class of models essentially neglect the interdependence of the energy sector and the rest of the economy. The second category, appropriately called energy-economy interaction models, are multisectoral and general equilibrium models focusing on the relationship between the energy sector and the rest of the economy. These models offer a rich economy-wide picture but are not as detailed as the first category in their specification of the energy sector. For energy-economy interaction analysis a number of models have been employed, including input-output, macro-econometric, and computable general equilibrium (CGE), as well as hybrid of these types. With advances in computation capabilities, however, CGE models have become the standard tool and dominate the mainstream of the economic discipline. The model presented in this paper belongs to the optimal depletion category of computable general equilibrium models. It is an optimization model that solves the inter-temporal depletion problem subject to workings of a multi-sector market economy, where relative prices play a crucial role. Such a formulation establishes general equilibrium linkages between the optimal depletion of the resource and the rest of the economy and thus it provides a systematic framework to analyze energy-economy interactions in resource-based economies.
Identifying Spatial Clusters within U.S. Organic Agriculture
Cheryl Brown and Daniel Eades
Research Paper #2006-10
View Paper 2006-10 (pp. 51, 1,963 KB)
Abstract: The market for organically produced products has experienced rapid growth in recent decades; however, this growth has not been distributed evenly across the country instead concentrating in certain regions. Employing measures of spatial concentration and association we identify those counties in which organic production is clustered or represents a proportion of the agricultural economy greater than what would be expected by national trends. Results show that spatial clustering of organic agriculture does exist based on data from the U.S. Census of Agriculture on organic farms, acreage, and value of sales. Counties with the largest location quotients for organic production were most often located in the western U.S., especially California, Washington, and Oregon, the Great Plains states, New England, and in some cases, select counties within Mid-Atlantic States. Organic production clusters as measured by the local Moran’s I statistic followed a similar pattern, clustering primarily in the western U.S. with additional High/high clusters found in the Great Plains, upper Midwest, and areas of New England. When these values were adjusted to represent organic agriculture’s share of a county’s total agriculture, central cluster counties were most likely to be found in New England. Results describing the correlation between organic support establishments and production within identified clusters suggest that organic operations in California and New England may be following different marketing strategies that promote or reduce the likelihood of identifying input-output relationships within these clusters.
County-Level Determinants of Local Public Services in Appalachia: A Multivariate Spatial Autoregressive Model Approach
Gebremeskel H. Gebremariam, Tesfa G. Gebremedhin, and Peter Schaeffer
Research Paper #2006-9
View Paper 2006-9 (pp. 29, 236 KB)
Abstract: A multivariate spatial autoregressive model of local public expenditure determination with autoregressive disturbance is developed and estimated in this paper. The empirical model is developed on the principles of utility maximization of a strictly quasi concave community utility function. The existence of spatial interdependence is tested using Moran’s I statistic and Lagrange Multiplier test statistics for both the spatial error and spatial lag models. The full model is estimated by efficient GMM following Kelejian and Prucha’s (1998) approach using county-level data from 418 Appalachian counties. The results indicate the existence of significant spillover effects among local governments with respect to spending in local public services. The OLS estimates of the conventional (non spatial) model of local public expenditure determination and the corresponding maximum likelihood estimates of the spatial lag and the spatial error models are also presented for comparison purposes. The GMM estimates are found to be more efficient.. . .
Modeling Small Business Growth, Migration Behavior, and Household Income in Appalachia: A Spatial Simultaneous Equations Approach
Gebremeskel H. Gebremariam, Tesfa G. Gebremedhin, and Peter Schaeffer
Research Paper #2006-8
View Paper 2006-8 (pp. 29, 227 KB)
Abstract: In this paper, a spatial simultaneous equations model of business growth, migration behavior and median household income is empirically estimated. The empirical simultaneous model is developed from the equilibrium relationships among these variables where each variable is assumed to adjust to its equilibrium level with a substantial lag through a partial equilibrium adjustment process. We use Generalized Spatial Three-Stage Least Squares estimator to estimate the empirical model using data from 418 Appalachian counties for 1990-2000. The results suggest the existence of very strong interdependences among business growth, migration behavior and median household income in the form of feed-back simultaneities, spatial autoregressive lag simultaneities and spatial cross-regressive lag simultaneities.
A Dynamic CGE Analysis of Exhaustible Resources: The Case of an Oil Exporting Developing Country
Research Paper #2006-7
View Paper 2006-07 (pp. 50, 240 KB)
Abstract: Extensive literature concerned with optimal depletion of an exhaustible resource, with only a few exceptions, ignores the economy-wide and sectoral distribution effects of resource depletion. This paper presents a dynamic computable general equilibrium model to link the underlying natural resource base to the economic performance. The model consists of an intra-temporal price endogenous multisectoral model of a market economy, embedded in an inter-temporal optimal growth and development model. This general equilibrium approach captures the economy-wide and sectoral distribution effects of resource depletion. The model is benchmarked for the Iranian data and is used to examine the issues related to optimal extraction of an exhaustible resource, optimal savings in the economy, and the allocation of investment funds.
Quality of Care in Appalachian Nursing Homes: Doing More with Less?
Mary W. Carter and Shuhui Wang
Research Paper #2006-6
View Paper 2006-06 (pp. 27, 445 KB)
Abstract: Despite comprising nearly 10% of the nation’s nursing home population, little is known about the quality of care provided by nursing homes located in rural Appalachia. However, anecdotal evidences suggests that the economic disadvantages associated with the Appalachian region may lead to higher concentrations of certain structural and organizational attributes previously shown to affect nursing home quality. In response, this study sought to examine empirically whether nursing homes located in Appalachia differ in the number of deficiency citations received in comparison with nursing homes located elsewhere, and to explore the extent to which factors other than quality of care determine nursing home survey outcomes. A secondary-data analysis using the Online Survey Certification and Reporting System was conducted. The most recently available survey conducted between March 2000 and February 2003 were used, providing 16,439 facility-level observations for analysis. Robust regression and spatial analysis techniques were used to examine quality differences. Results indicate that wide variation across regions and even within states exist in the patterns of deficiency citation issued to nursing homes, and that a substantial proportion of this variation is associated with structural and organizational factors, rather than true quality of care differences. Before regional differences in nursing home quality of care can be understood and subsequently addressed, further effort is needed to investigate the extent to which regional differences in the survey process itself systematically affect conclusions about nursing home quality of care performance.
Theoretical Perspectives on Industry Clusters
Gashawbeza W. Bekele and Randall W. Jackson
Research Paper #2006-5
View Paper 2006-05 (pp. 26, 145 KB)
Abstract: The concept of industry clustering has generated much discussion in regional economic development theory and practice in recent years. Yet it is fair to say that an accepted definition or a unified theoretical framework has failed to emerge from the discussion, as the concept often seems to enliven itself under divergent theoretical approaches, including but not limited to work on agglomeration economies, industrial districts, business networks, knowledge spillovers, and regional innovation systems. This paper provides a review of the major theoretical propositions that seek to explain the clustering of economic activity and its presumed link with regional economic development. While there is undoubtedly some overlap on some of the explanations offered by various theoretical perspectives, the concept of clustering has been used so widely in varying contexts and in a multifaceted manner that it risks creating more confusion than clarity, especially in empirical research.
Examining and Evaluating Aggregation Scale Effects on Interregional Commodity by Industry Trade Flow Estimates
Walter R. Schwarm and Randall W. Jackson
Research Paper #2006-4
View Paper 2006-04 (pp. 20, 80 KB)
Abstract: This study tests the implementation of interindustry transaction flows in a national system of economic regions derived from an interregional accounting framework and initial information on interregional shipments. The interregional flows connecting states are estimated using a method based on the Commodity Flow Survey data published by the Bureau of Transportation Statistics, which adjusts the estimated interregional SAM to insure the integrity of intraregional and system-wide, national accounts. The resulting US interregional framework describes flows within and among the 51 regions We examine results of a series of trials testing the validity of the resulting interregional trade-flow data versus other data sources and estimates such as Liu and Vilain (2004). The overall difference in estimation accuracy arising from differences in the base aggregation level is a quantity that has attracted little prior attention. To address this issue this paper, in addition to estimating and comparing trade flows using aggregated sectors, also estimates the flows using the 509 disaggregated IMPLAN sectors applies aggregation only in the final comparison steps. This allows us to comment on the additional role sectoral aggregation scale may play in the relative accuracy of trade flow estimation results.
An Empirical Analysis of County-Level Determinants of Small Business Growth and Poverty in Appalachia: A Spatial Simultaneous-Equations Approach
Gebremeskel H. Gebremariam, Tesfa G. Gebremedhin, and Peter V. Schaeffer
Research Paper #2006-3
View Paper 2006-3 (pp. 43, 215 KB)
Abstract: A spatial simultaneous-equations growth equilibrium model estimated by GS2SLS and GS3SLS estimators is used to determine the interdependence between small business growth and poverty. The parameter estimates are mostly consistent with the theoretical expectations. The coefficients for the endogenous variables of the model are positive and significant indicating strong interdependence (feedback simultaneity) between small business and median household income growth rates. The results also show the presence of spatial autoregressive lag simultaneity and spatial cross-regressive lag simultaneity, with respect to both small business and median household income growth rates, and the existence of spatial correlation in the error terms. In addition, the estimates of the structural parameters show that there were strong agglomerative effects and significant conditional convergence with respect to both small business growth and median household income growth in Appalachia during the study period.
Participatory Watershed Management for Sustainable Rural Livelihoods in India
Budumuru Yoganand and Tesfa G. Gebremedhin
Research Paper #2006-2
View Paper 2006-02 (pp. 18, 59 KB)
Abstract: International development goals moved beyond increasing food production to include poverty reduction and protecting the environment in a sustainable way. Degradation of natural resources due to exploitation coupled with population pressure in developing countries causing food insecurity and environmental degradation further. Participatory watershed management approach is proposed to address this problem effectively.
The Interaction between Individuals’ Destination Choice and Occupational Choice: A Simultaneous Equation Approach
Christiadi and Brian Cushing
Research Paper #2006-1
Printed in Journal of Regional Science, 48, 893-919.
Abstract: This study examines the relationship between an individual’s occupation choice and destination choice. It portrays the relationship as an interaction between the supply of occupational skills by individuals and demand by different labor market regions. The analysis applies a two-equation simultaneous system: (1) a multinomial logit model of occupational choice and (2) a conditional logit model of state destination choice. The unusual merger of multinomial logit and conditional logit models in a simultaneous equation framework requires derivation of a unique variance-covariance matrix. The results indicate strong association between supply of (migration) and demand for (industry mix) an individual’s occupational skills. [JEL Classification: R23, J61, J62]
The Role of Welfare and Space in the Migration of the Poor
Research Paper #2005-8 [replaces working paper 2002-16]
View Paper 2005-08 (pp. 30, 220 KB)
Abstract: This study investigates whether interstate differences in welfare benefits affected destination choices of low-income households in the United States during the 1985-90 period. It considers place-to-place migration decisions of poor single-parent females within a conditional logit framework. The research develops an array of variables that add a substantial spatial component to the analysis. The empirical results reconcile conclusions of recent academic literature with the views of state policy officials, but in a somewhat unexpected way. This study finds only modest evidence of a welfare magnet effect, and only for contiguous states. On the other hand, the study strongly confirms the importance of space and connections between places when explaining migration of the poor.
Cross-Border Shopping and the Sales Tax: A Reexamination of Food Purchases in West Virginia
Mehmet Serkan Tosun and Mark Skidmore
Research Paper #2005-7
View Paper 2005-07 (pp. 28, 191 KB)
Abstract: In this paper new evidence is presented of cross-border shopping in response to sales taxation. While several instructive studies provide estimates of the cross-border shopping effect, a unique opportunity is utilized to evaluate the effect of a large discrete change in sales tax policy. Using county level data on food income and sales tax data for West Virginia over the 1982-2000 period it is estimated that for every one-percentage point increase in the county relative price ratio due to sales tax change, the per capita food income decreases by about 0.7 percent. The estimates indicate that food sales fell in West Virginia border counties by about 4 percent as a result of the imposition of the 6 percent sales tax on food in 1989.
Loglinear Residual Tests of Moran’s I Autocorrelation: An Application to
Kentucky Breast Cancer Data
Ge Lin and Tonglin Zhang
Research Paper #2005-6
View Paper 2005-06 (pp. 13, 305 KB)
Abstract: Spatial regressions have been widely used, but their use with the permutation tests of residuals either in linear or logllinear models is rarely seen. In the present study, we have linked the Cliff-Ord permutation test of Moran’s I on linear regression errors to loglinear regression residuals under asymptotic normality. We devised both Pearson residual Moran’s IP R and deviance residual Moran’s IDR tests and applied them to a set of log-rate models for early stage and late-stage breast cancer together with socioeconomic and access-to-care data in Kentucky. The results showed that socioeconomic and access-to-care variables were sufficient to account for spatial clustering of early stage breast carcinomas with breast cancer screening and number of primary care providers being more persistent than county median family income. For late-stage carcinomas, in contrast, the late-stage incidence rate was negatively associated with breast cancer screening level. This result confirmed our expectation: a high screening level is associated with high incidence rate of early stage disease, which in turn reduces late-stage incidence rates. In addition, we located four late-stage breast cancer clusters that cannot be explained by socioeconomic and access-to-care variables.
Specification of Functional Form in Models of Population Migration
Research Paper #2005-5
View Paper 2005-05 (pp. 19, 171 KB)
Abstract: A characteristic of the empirical literature on internal population migration is widely varying results and often conflicting conclusions regarding relative importance of explanatory factors. There are a number of possible explanations for these conflicting findings, some of which have received little attention in the literature. This paper focuses on one major specification issue in the context of an aggregate migration model: choice of functional form. The discussion lays out a theoretical basis for choosing functional form. It follows this with a comparison of empirical results for several functional forms. Statistical tests are used to choose the most appropriate functional form.
Factors Influencing Venture Capital Availability in Rural States:
Possible Lessons Learned from West Virginia
David W. Hughes, Kris Mallory, and Mihaela Szabo
Research Paper #2005-4
Abstract: Venture capital has been identified by many as a vital element in the rapid economic growth of certain regions. The lack of access to capital, especially equity capital, has been identified as a major constraint to the economic growth of rural areas (i.e., venture capital access, as a centripetal force, concentrates rather than disperses economic activity). Researchers have advanced a focus on primarily urban sectors, such as information technologies, higher administration costs due to a lack of deal flow, and a limited support network for entrepreneurs as explanations for the lack of venture capital in rural areas. Yet, some venture capital firms are starting to develop interest in investing in rural businesses. Venture capital firms currently operating in West Virginia are surveyed concerning relevant issues, including expected rate of return, knowledge of natural resource based sectors, and the impact of distance on venture capital investments in rural areas. Survey results imply that venture capital can diffuse in rural communities that are not necessarily nearby. Likewise, lack of knowledge concerning natural resource based businesses was not a deterrent. Survey results strongly indicate that companies applying for venture capital in West Virginia had little understanding of how venture capital firms interact with portfolio firms or even the basic nature of venture capital. Survey results support the contentions that a lack of deal flow and entrepreneur support networks and culture are barriers. But, survey results did not agree that venture capital firms operating in smaller metropolitan and rural areas are willing to accept lower rates of return in rural as opposed to urban areas.
Formula Apportionment, Tax Competition, and the Provision of Local Goods
Santiago M. Pinto
Research Paper #2005-3
View Paper 2005-03 (pp. 18, 214 KB)
Abstract: The paper develops an analytical framework where regional governments strategically determine the structure of the corporate profit tax system and profits are regionally allocated using an apportionment formula. Two important results emerge in a symmetric Nash equilibrium: (i) investment decisions are distorted, i.e., regional governments will not allow complete deduction of capital costs from taxable corporate profits; and (ii) there is underprovision of the good provided by the regional government, consistent with the literature on property tax competition. The paper also shows that the degree of underprovision may be less severe when the formula employs sales shares to apportion corporate profits. The model allows us to presume that the recent shift by most states in the U.S. towards a formula apportionment that gives a higher weight to the sales proportion may constitute a welfare improvement for all regions, compared to the original formula that weighs all factors equally.
Assessing Demographic Changes and Income Inequalities: A Case Study of West Virginia
Yohannes G. Hailu, Tesfa G. Gebremedhin, and Randall W. Jackson
Research Paper #2005-2
View Paper 2005-02 (pp. 25, 190 KB)
Abstract: The study examines the trends in demographic changes and income inequalities in West Virginia from 1990 to 2000. The relationship between economic growth and income inequality is tested using a system of equations model and county level data. The empirical results indicate that except for 65 years and above age group, income inequality increased in all other age groups. The highest increase was in the age group under 25 years and those 35 to 44 years. Using 3-Stage-Least-Squares estimations, the endogenous dependent variable per capita income growth was positively related with population and employment growth, but it is significantly and negatively related with income inequality measured by county level Gini index. This indicates that higher income inequality is associated with slower economic growth in West Virginia.
Commodity Price Fluctuations: A Century of Analysis
Walter C. Labys
Research Paper #2005-1
View Paper 2005-01 (pp. 45, 255 KB)
Abstract: Commodity prices again! The twentieth century has only been the latest spectator to the impacts and importance of commodity price fluctuations. It is reasonably well known that commodity price records have come down to us from the ancient civilizations of India, Mesopotamia, Egypt, Greece and Rome. Earlier in the century, formal research began on the relationships between agricultural demand, supply and prices in a market context. This research not only evolved in sophistication but extended to mineral and energy commodities. Also at the beginning of the century, some of the earliest work took place on applying statistical methods to price series. The purpose of this paper is to review how this progress has contributed to analyzing commodity markets and prices and to solving price forecasting problems, concentrating on more recent advances in econometric modeling and time series analysis. Attention is also paid to spatial developments that have implications for regional price modeling.
Effects of Zoning on Residential Option Value
Jonathan C. Young (Ronald E. McNair Scholar)
Research Paper #2004-12
View Paper 2004-12 (pp. 16, 43KB)
Abstract: Knowing more precisely how zoning affects housing value would allow policy-makers to improve long-term policy decisions. Previous studies have concluded that local zoning regulations affect residential option value. These studies, however, do not specify the magnitude of the effect for varying zoning types. This study quantifies zoning’s effect on residential option value for specific types of zoning using a hedonic regression model of housing prices. The study utilizes information on housing characteristics and sales prices for a cross-section of houses in Monongalia County, West Virginia. The research develops two models to differentiate between zoning effects on developed versus undeveloped properties. The research finds that R1 and R1a zoning regulations – the most common types of residential zoning in Monongalia County – significantly impact housing value.
Location-Specific Amenities, Equilibrium, and Constraints on Location Choices
Research Paper #2004-11 [revised January 2008]
View Paper 2004-11 (pp. 17, 45KB)
Abstract: This research considers how preferences for location-specific attributes might constrain migration destination choices. In particular, if, at any given time, most people are consuming their desired location-specific attributes, then unwillingness to give up these attributes may influence the decision to migrate. For those who migrate, these desired attributes might significantly constrain the locations they would consider. This perspective differs substantially from the normal approach that assumes people move toward “good attributes” and away from “bad attributes.” The research provides an initial test of a “constrained destination choice” hypothesis by considering “locational attribute constraints” in the context of aggregate place-to-place migration flows for U.S. metropolitan areas during the 1995-2000 time period.
The Role of Small Business in Economic Growth and Poverty Alleviation in West Virginia:
An Empirical Analysis
Gebremeskel H. Grebremariam, Tesfa G. Gebremedhin, and Randall W. Jackson
Research Paper #2004-10
View Paper 2004-10 (pp. 25, 78KB)
Abstract: The main objective of the study is to empirically evaluate the critical roles of small businesses in economic growth and poverty alleviation in West Virginia. In OLS and 2SLS regression analysis a positive relationship exists between small business and economic growth. A strong inverse relationship also exists between the incidence of poverty and small business and economic growth. Thus, the empirical result establishes the linkage between small business, economic growth and the incidence of poverty.
An Economic Impact Study of the Pennsylvania Section of the Cove Point Expansion
(prepared for Dominion Resources, Inc.)
Randall Jackson and Walter Schwarm
Research Paper #2004-9
View Paper (pp. 19, 639 KB)
Abstract: Not available.
Labor Market Size and Unemployment Duration: A Theoretical Note
Peter V. Schaeffer and Tesfa G. Gebremedhin
Research Paper #2004-8 [Revised 3/07]
View Paper 2004-08 (pp. 15, 396KB)
Abstract: When job prospects are uncertain, labor market size matters even when labor and jobs, respectively, are homogenous. The expected unemployment duration and its standard deviation may then differ systematically with labor market size.
Developing Integrated Object-Oriented Conception of Geomarketing as a Tool for Promotion of Regional Sustainable Development: The Case Study of Ukraine
Volodymyr M. Anderson
Research Paper #2004-7
View Paper 2004-07 (pp. 30, 357KB)
Abstract: In the paper we propose and discuss new vision of geomarketing as a tool for promotion of regional sustainable development. Integrated object-oriented conception of geomarketing was designed by adoption and elaboration of some new ideas and approaches, such as “place marketing”, “non-profit marketing”, “counter-marketing”, “collaborative spatial decision-making”, “endogenous regional development”, “regional sustainable development”, “public-private partnership”. We explore how geomarketing in such a comprehension may be implemented in business and public administration, regional development policy making on example of some Ukrainian firms, regional governments, and communities. The proposed geomarketing conception is based on integration of three different interpretations of geomarketing: 1) as a traditional marketing tool providing procedures of ‘geosegmentation’ and ‘geopositioning’ in market analysis; 2) as a marketing of places (placemarketing); 3) as a marketing of geographic knowledge and technologies helping to promote sustainable regional development. Such a complex approach foresees systematical empirical study of innovations and changes in these domains with the purpose to develop a general theory of geomarketing as a tool for promotion of sustainable development at local and regional levels.
What’s Wrong with Economic Geography? Other Thoughts on the Rift
Gordon F. Mulligan
Research Paper #2004-6
View Paper (pp. 7, 25KB) Forthcoming in the Canadian Journal of Regional Science.
Abstract: Not available.
Method for Constructing Commodity by Industry Flow Matrices
Randall W. Jackson, Walter R. Schwarm, Yasuhide Okuyama, and Samia Islam
Research Paper #2004-5
view paper (pp. 14, 78KB)
Abstract: This paper describes the method 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) SAMs using data 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 Transportations Statistics. The estimated interregional SAM is then adjusted to insure the integrity of intraregional and system-wide accounts. The procedures have been designed with the goal of ease of replicability, so that updates and extensions of the database can be generated efficiently and at much lower cost as new data are released. The resulting US interregional framework describes flows within and among the 50 states and the District of Colombia, and will provide a valuable database for a broad range of analysis on regions, interregional relationships and policy research.
Non-Linear Input-Output Models: Practicability and Potential
Guy R. West and Randall W. Jackson
Research Paper #2004-4
View Paper (pp. 18, 618KB)
Abstract: The conventional input-output model has been widely criticized, both justly and unjustly, for its limiting assumptions. One of these assumptions is homogeneity of degree one. This paper explores some approaches to minimize this limitation of traditional input-output analysis by removing the assumption of linear coefficients for the intermediate and household sectors. As is well documented in the literature, the household sector is the dominant component of multiplier effects in an input-output model, so using marginal income and expenditure coefficients for the household sector provides a more accurate estimate of the multiplier effects. A price model can then be utilized to estimate the relative changes in local to imported inputs.
There are several implications arising from the use of this model, compared to the conventional input-output model. Firstly, while the output multipliers and impacts may not be significantly different between the two models, we would expect the income and employment impacts to be smaller in the marginal coefficient model. This is because many industries, especially those which are more capital intensive and can implement further productivity gains, can increase output, particularly in the short run, without corresponding proportional increases in employment and hence income payments. However, when price effects are incorporated into the model, the direction of change becomes less clear. Secondly, unlike the conventional input-output model in which the multiplier value is the same for all multiples of the initial shock, the multiplier values from the marginal coefficient model vary with the size of the initial impact. Thus larger changes in final demand will tend to be associated with smaller multipliers than small changes in final demand. Therefore, the differential impacts of the marginal coefficient model are not additive, unlike the conventional (linear) Leontief model and CGE model. While not attempting to be a substitute for a CGE model, the methods described in this paper could be used where construction of CGE models are impracticable due to cost and data considerations.
Human Capital, Migration Strategy, and Brain Drain
Research Paper #2004-3 [Paper reprinted in Journal of International Trade & Economic Development, 14,3: 319-335 (2005)]
Abstract: This research was motivated by the increasing number of foreign students and scientists who are in the United States on temporary visas who are able to change their status to permanent immigrant. Origin countries, among them industrialized western European nations, are concerned about losing many of their best educated and most talented citizens. This article modifies and extends a theoretical model of optimal human capital investment before and after migration to shed new light on the emigration/immigration of the highly skilled, and explores some possible implications for the study of the so-called brain drain phenomenon.
Pull Factor Estimates for Retail Sales in West Virginia Counties
David W. Hughes
Research Paper #2004-2
View Paper (pp. 25, 97KB)
Abstract: Pull factors provide a measure of retail trade capture. Pull factors for total and twelve subcategories of retail sales for all West Virginia Counties are analyzed based on 1997 Census of Retail Trade data. A method for estimating missing data points and the use of Rand-McNally trade regions both facilitate estimation of the pull factors. Results indicate that hypothesizes concerning pull factors for central places in West Virginia generally hold. However, other elements influence pull factor estimates. The most important of these is the impact of state sales tax policy, which reduces pull factors for border cities through lessened retail activity in food and drinking establishment and gas stations. Study results imply that state government may wish to rethink its sale tax policy.
Dematerialization and Transmaterialization: What Have We Learned?
Walter C. Labys
Research Paper #2004-1
View Paper (pp. 22, 82KB)
Abstract: Long-term materials demand patterns are important to examine because of the possibility of material obsolescence as well as the long lead times required to create new mineral productive capacity. Since structural changes in materials demand are inevitably linked to the performance and adjustments of national economies, materials life cycles have often been examined in the context of intensity of use (IOU). Explanations of these structural changes have focused on dematerialization; this concept implies a structural change in an economy embodying a reduced demand for materials and, therefore, a decline in overall industrial growth. An alternative view is that of transmaterialization, which implies a recurring industrial transformation in the way that economic societies use materials, a process that has occurred regularly or cyclically throughout history. These patterns vary notably across regions. The purpose of this paper is to explore more recent developments in the analysis of these concepts and to provide new directions for future applications.
Economics of Natural Disasters: A Critical Review
Research Paper #2003-12
View Paper (pp. 25, 232KB)
Abstract: Significant progress has been made in recent years for modeling spatial economic impacts of disasters in a regional context (for example, Okuyama and Chang, eds. Modeling the Spatial Economic Impacts of Disasters, forthcoming). While these advancements are more toward modeling strategies based on conventional frameworks, little has been dealt with the theory on economics of disasters, since the pioneering work by Dacy and Kunreuther (The Economics of Natural Disasters, 1969). In this paper, The Economics of Natural Disasters is reviewed and updated for providing a theoretical perspective toward disaster related research. The review is carried our through restructuring the framework of Dacy and Kunreuther with new findings from the recent studies and extending it to a regional context. In addition, the paper proposes the research directions for constructing further the theory on economics of disaster.
The Impacts of Walter Isard on Geography
Randall W. Jackson
Research Paper #2003-11 (Paper replaced by reprint in Journal of Geographical Systems. 6,1: 71-77.)
Abstract: In the course of preparing this paper, which initially focused solely on identifying the impacts of input-output analysis on geography, a much broader perspective on the impacts of Walter Isard on geography ultimately emerged. In the tradition of input-output analysis, these impacts are grouped into direct, indirect, and induced effects, and summarized under the heading of influence. Walter Isard touched the lives of many through personal relationships, books and articles, and an energetic devotion to and enthusiasm for the creation of a regional science association. The Regional Science Association and its publications supported something of a greenhouse environment in which the seedlings of GIS and scientific geography could take root, until they were well enough established to enter mainstream geography. While clearly not limited to geography, the fruits of Walter Isard’s labors continue to populate the discipline through his contemporaries, their students, students’ students, and so on. The formative years of both regional science and scientific geography left an indelible mark on the nature of geographic inquiry.
Are Travel Demand Forecasting Models Biased because of Uncorrected Spatial Autocorrelation?
Research Paper #2003-10
View Paper (pp. 17, 89KB)
Abstract: This paper discusses spatial autocorrelation in mode choice models, including what kind of bias it introduces and how to remedy the problem. The research shows that a spatially autocorrelated mode choice model, not uncommon because of, in terms of transit characteristics homogeneous neighborhoods, systematically overestimates transit trips from suburban transit-unfriendly areas and underestimates transit trips in the transit-friendly city center. Adding a spatial lag term into the model specification avoids the bias, however, it also changes sampling approaches, requires higher quality household forecast data and complicates forecasting.
A Method for Testing Low-Value Spatial Clustering for Rare Diseases
Ge Lin and Tonglin Zhang
Research Paper #2003-9
View Paper (pp. 16, 231KB)
Abstract: We propose a method to test for the existence of low-value spatial clustering while accounting for the influence of high-value clustering and outliers. Although the method is in reference to the Tango test, it can be extended to other testing methods. The simulation results show that the proposed method can effectively detect low-value clustering with substantially lower rates of type I errors than those of the Tango test, while maintaining statistical power that is comparable to that of the Tango test. A case study of leukemia in Minnesota shows that there is an overall tendency of low-value clustering of male leukemia mortality, and that the evidence for females is inconclusive.
A Survey Analysis of Participation in a Community Forest Management in Nepal
Vishakha Maskey, Tesfa G. Gebremedhin, and Timothy J. Dalton
Research Paper #2003-8
View Paper (pp. 21, 65KB)
Abstract: The main objective of the study is to determine which socio-economic factors affect levels of individual participation in the “Ludi-damgade” community forest. The empirical evidence for participation as a function of social status is obtained by using an ordered probit model. The model also estimates the marginal effects of socio-economic factors on different levels of participation suggesting how per unit change in such socio-economic characters affects the level of participation. Results from the two-stage least squares model also verify that participation in forest management determines the level of benefits received from the community forest. The study suggests that participation in common property resource management is based on the socio-economic profile of an individual and the level of participation is determined by the benefits obtained from the forest. The empirical results are expected to aid policy makers in empowering people of lower socio-economic status to understand the importance of community forest management in order to have equal distribution of benefits accrued by community forest.
Prospects for Coal Transport and Export in Botswana
Khaulani Fichani and Walter C. Labys
Research Paper #2003-7
View Paper (pp. 30, 332KB)
Abstract: Botswana has vast proven deposits of steam coal, which for a long time the government has wanted to develop but without much success. The main objectives of this study are: 1) to forecast possible coal exports from Botswana and the land routes for these exports, 2) to determine the competitiveness of Botswana’s coal in world steam coal trade, and 3) to make recommendations on the appropriate policy for the exploitation of this coal. To accomplish these objectives, we construct a model of the global steam coal trade and apply this model to forecast the likely optimal size of mine, timing of capacity and choice of export port for the years 2005 and 2010 from a 2000 base forecast year. The results of our regional analysis suggest that Botswana’s coal exports are competitive in Asia and Western Europe. These results are shown to be least sensitive to changes in rail transportation costs and marginal supply costs but more sensitive to changes in capital costs for mine development.
Alternate Input-Output Matrix Updating Formulations
Randall W. Jackson and Alan T. Murray
Research Paper #2003-6
View Paper with Acrobat Reader (pp. 21, 248KB)
Abstract: There has been a recent resurgence of interest in biproportional adjustment methods for updating and interpreting change in matrix representations of regional structures, most commonly input-output accounts. Although the biproportional method, commonly called the RAS technique in the input-output literature, has been shown to have a number of theoretically appealing properties, various alternatives do exist. In this paper, we develop and assess empirically a number of alternatives, comparing performance and examining attributes of these adjustment methods. Two of these are sign-preserving updating methods for use when tables contain both positive and negative entries. One of these is shown to generate less information gain than Junius and Oosterhaven’s generalized RAS method which was formulated to deal with matrices with both positive and negative values. Overall, while the RAS method continues to be commonly used and its choice is often rational, alternative methods can perform as well or better along certain dimensions and in certain contexts.
Estimating the Impact of the Local Health Care Sector on a Rural Economy using an IMPLAN based SAM
David W. Hughes and Tom Walker
Research Paper #2003-5
View Paper (pp. 20, 132KB)
Abstract: An IMPLAN-based social accounting matrix (SAM) is used to estimate health care sector impacts on the Morgan County (West Virginia) economy. The SAM is a hybrid of the IMPLAN-SAM, which has an inadequate linkage between industry payments to workers and resulting household spending. An income distribution matrix provides this linkage. This matrix is based on the 1990 Census Public Use Microdata dataset for money payments and on a variety of data sources that account for the distribution of non-money income. Output multipliers and results of a local hospital impact scenario are compared between the original and reformulated models.
Distance Decay in Employment and Spatial Spillovers of Highways in Appalachia
Research Paper #2003-4 [revised]
View Paper (pp. 25, 589KB)
Abstract: The impact of transportation infrastructure on regional employment can be reflected through changes in the accessibility of the region affected. Lack of connectivity implies lack of choice, innovation and intellectual opportunity. The impact of infrastructure transcends the boundaries of regions. A certain region may benefit from a public project (e.g., an airport or an interstate), even though the facilities are located in another region. The extent of these spillovers can be determined by using a measure of accessibility/proximity to highway infrastructure in a model of employment.
State Minimum Wage Laws and the Migration of the Poor
Research Paper #2003-3
View Paper (pp. 26, 216KB)
Abstract: A substantial literature considers migration of the poor, mostly focusing on the relative importance of welfare programs versus labor market opportunities in the migration decisions of the poor. Likewise, a growing literature investigates the effect of changes in the minimum wage on U.S. poverty, focusing exclusively on the federal minimum wage. These two literatures have not intersected to examine how minimum wage laws influence migration decisions of the poor. Real federal minimum wages, minimum wage coverage, and state minimum wage laws all vary spatially. This research investigates the extent to which federal and state minimum wage laws affected migration choices of low-income households in the United States during the 1985-90 period. The study finds that the level of state minimum wages and the extent of federal minimum wage coverage both alter migration choices of the poor.
The Importance of the Regional/Local Dimension of Sustainable Development: An Illustrative Computable General Equilibrium Analysis of the Jersey Economy
D. Lermonth, P. G. McGregor, J. K. Swales, K. R. Turner, and Y. P. Yin
Research Paper #2003-2
View Paper (pp. 36, 452KB)
Abstract: This paper uses a multi-period economic-environmental Computable General Equilibrium (CGE) modelling framework to analyze local sustainability policy issues. Our focus is the small, open, labour-constrained regional economy of Jersey. We employ CGE model simulations to track the impact of changes in population on a number of energy-consumption and pollution indicators under alternative hypotheses regarding economic conditions over the time period under consideration. In the case of Jersey, we find that household consumption is the key factor governing the environmental impact of economic disturbances. Therefore the analysis includes an examination of the sensitivity of the simulation results to different assumptions affecting the wage elasticity of labour demand and therefore the responsiveness of household income to shifts in labour supply.
Modeling Trade and Environmental Linkages in China
Walter C. Labys
Research Paper #2003-1
View Paper (pp. 40, 255KB)
Abstract: Interactions between trade and the environment have been studied extensively as a reaction to the pressure that the accelerated pace of globalization has placed on environment and trade. Distinguishing itself from previous work, this study focuses on a modeling analysis of the interactions between trade and the environment in China. A nonlinear simultaneous equation trade and environment model (TEM) is presented that expands Dean’s basic model by endogenizing the trade and foreign direct investment variables. This model can be used not only to analyze the trade impacts of environmental policies and the environmental impact of trade, but also to identify the sources of those influences. In addition, the nonlinear specification of the relationship between emissions and economic scales allows for an explicit test of the environmental Kuznets curve. Using the White heteroscedasticity consistent covariance matrix estimator and employing a Chinese regional panel data set, the empirical results suggest that there may indeed have existed a trade-off between economic growth and environmental protection in China’s development. That is, increased trade and rapid economic growth may have led to greater pollution emissions on the one hand, while environmental policies may have led to reduced economic growth and reduced trade on the other. Policy alternatives to mitigate these negative impacts also are explored.
Interregion-Occupational Persistence and Dispersion: A Model of Geographic and
Ge Lin and Christiadi
Research Paper #2002-18
View Paper with Acrobat Reader (pp. 23, 197KB)
Abstract: This paper represents the first attempt to develop a set of loglinear models that synthesize gravity models of interregional mobility and loglinear models of occupational mobility. The development of the model is progressed from a simple two-way mobility table analysis to a three-way analysis that controls for one aspect of mobility while investigating another and eventually to a four-way analysis that simultaneously assesses the joint effect of occupational and geographic mobility. An example based on data from the 1970 United States census demonstrates that the models can effectively capture the joint effect of occupational and geographic mobility. The results show that as far as interregional migration is concerned, people were not necessarily more likely to have occupational persistence. Interregional migration was positively associated with both upward and downward occupational mobility, and the propensity for upward mobility was slightly greater than that for downward mobility. Females were likely to be disadvantaged when they remained in their regions. When females moved to other regions, however, their chances of upward mobility were about the same as those of males.
Scale and Unit Specification Influences in Harvest Scheduling with Maximum Area Restrictions
Alan T. Murray and Andrés Weintraub
Research Paper #2002-17 [replaced by a reprint in Forest Science 48,4: 779-788 (2002)]
View pdf file
Abstract: This paper examines alternative approaches for representing a forest region to be scheduled for harvesting, where the primary concerns are maximizing return and imposing a maximum contiguous area of disturbance restriction. One approach assumes that any two adjacent management units exceed a regulated maximum area of disturbance. An alternative approach recognizes that management units may be substantially smaller than the maximum area restriction, so simultaneously disturbing two neighboring units does not necessarily represent a maximum area violation. The distinguishing feature of these two approaches is the way in which a forest is spatially represented. A single time period, 351 management unit harvest scheduling problem is utilized to investigate whether analysis results are subject to manipulation when forest representation, and associated modeling, is interpreted in different ways. Empirical results highlight significant economic and spatial variation in harvest schedules when maximum area restrictions are imposed using alternative approaches.
The Role of Welfare and Space in the Migration of the Poor
Brian J. Cushing
Research Paper #2002-16
View Paper (pp. 30, 210KB)
Abstract: This study investigates whether interstate differences in welfare benefits affected destination choices of low-income households in the United States during the 1985-90 period. It considers place-to-place migration decisions within a conditional logit framework. The research develops an array of variables that add a substantial spatial component to the analysis, with particular emphasis on measures of distance and the spatial distribution of significant population agglomerations. The empirical results do not support the existence of a general welfare magnet effect, but strongly support the hypothesis of a more limited effect related to a combination of welfare differences and nearby large population agglomerations.
A GIS Method to Assess Distance Effects on Hospitalizations
Research Paper #2002-15
View Paper (pp. 23, 464KB)
Abstract: Not Available.
Constructing US Interregional SAMS from IMPLAN Data: Issues and Methods
Randall W. Jackson
Research Paper #2002-14
View Paper with Acrobat Reader (pp. 12, 185KB)
Abstract: Many issues arise in the construction of interregional SAMs. In the US, a convenient point of departure is the foundation provided by commodity-by-industry subnational SAMS that can be generated from IMPLAN data. Unfortunately, because the SAMs are generated independently, there is no guarantee of consistency with known national totals. In particular, the sum of IMPLAN generated domestic regional exports across all regions will equal the sum of IMPLAN generated domestic regional imports only by chance. Additionally, while IMPLAN generates total domestic imports and total domestic exports for each region, the analyst must devise an acceptable method for distributing interregional domestic trade. These and other issues that arise in the organization and estimation of the interregional SAM are addressed in this paper.
A Spatial Logit Association Model for Cluster Detection
Research Paper #2002-13
Paper is replaced by reprint in Geographical Analysis 35,4 329-340, 2003
Abstract: In this paper, I propose a logit spatial association model for binary spatial events and develop a scan algorithm to search for spatial associations. I extend the traditional logit model with spatial autocorrelated component so that the model includes not only known risk factors, but also spatially autocorrelated regions as a control or explanatory factor. The case study of West Virginia Lung Cancer shows that the model effectively captures cool and hot spots in lung cancer mortality.
Linking Economic Model and Engineering Model: Application of
Sequential Interindustry Model (SIM)
Yasuhide Okuyama and Hyunwoo Lim
Research Paper #2002-12
View Paper with Acrobat Reader (pp. 32, 262K)
Abstract: A conventional approach to model the regional economic impacts of a catastrophic disaster has been to employ the results from an engineering model, such as lifeline network model, in an economic model, for example input-output framework or computable general equilibrium model. However, due to the differences in modeling scheme between economic and engineering models, this type of data feed creates problems regarding sensitivity and dynamics of the impacts. In this paper, Sequential Interindustry Model (SIM) is used to disaggregate the process of production chronology to become more sensitive to the changes/damages of economic activities under a disaster situation. SIM is particularly useful to simulate the dynamic processes of impact propagation and of structural changes after a catastrophic disaster. In this paper, the issues and applications of SIM are discussed with numerical examples.
Economic Impacts of Unscheduled Events: Sequential Interindustry Model (SIM) Approach
Yasuhide Okuyama, Geoffrey J. D. Hewings, and Michael Sonis
Research Paper #2002-11
View Paper with Acrobat Reader (pp. 20, 72KB)
Abstract: Regional economic models have been challenged to incorporate with structural changes in the economy. Especially, when a structural change is sudden, unpredictable, yet extensive, such as damages from a natural disaster, conventional models can hardly confront such significant changes due to their assumption of incremental changes. Sequential Interindustry Model (SIM) is an extension of the input-output framework that enables to trace the production process and the path of the impacts. SIM is particularly useful to simulate the dynamic process of impact propagation and of structural changes after a catastrophic disaster. In this paper, the issues and extensions of SIM are discussed with numerical examples.
Structural Change of the Chicago Economy: A Temporal Inverse Analysis
Yasuhide Okuyama, Michael Sonis and Geoffrey J. D. Hewings
Research Paper #2002-10
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Abstract: An earlier study (Sonis and Hewings, 1998) proposed an alternative tool that can assist in exploiting trends and uncovering tendencies in individual sectors or groups of sectors within the context of an economy-wide system of accounts. In this paper, the methodology, Temporal Leontief Inverse Analysis, is applied to a set of annual input-output tables for the Chicago metropolitan economy during the period of 1980-97. The results are compared to the earlier analysis (Hewings et al., 1998, Okuyama et al., 2002a, and Okuyama et al. 2002b) to examine the method and to investigate further the structural changes of the Chicago economy.
Alternate Input-Output Matrix Updating Formulations
Randall W. Jackson and Alan T. Murray
Research Paper #2002-9
[Paper is replaced by reprint of article in Economic Systems Research 16,2:135-148, (2004)].
Abstract: There has been a recent resurgence of interest in biproportional adjustment methods for updating and interpreting change in matrix representations of regional structures, most commonly input-output accounts. Although the biproportional method, commonly called the RAS technique in the input-output context, has been shown to have a number of theoretically appealing properties, various alternatives do exist. In this paper, we develop and assess empirically a number of alternatives, comparing performance and examining attributes of these adjustment methods.
Modeling Migration Effects on Agricultural Lands: A Growth Equilibrium Model
Yohannes G. Hailu and Randall S. Rosenberger
Research Paper #2002-8
[Paper is reprinted in Agricultural and Resources Economics Review, 33,1: 50-60 (2004).]
Abstract: Growth in population and employment can result in increased demands on agricultural land for non-agricultural uses. This study develops a growth equilibrium model at the county-level for the state of West Virginia. Each growth model is a structural equation model that addresses the endogeneity of population densities and employment densities. Three single-decade models are specified – 1970s, 1980s, and 1990s using a two-stage least squares regression technique. Each model is unique, reflecting changing population and economic structures over time. For West Virginia, our results suggest that jobs follow people. Population density in 1990 was positively related to areas with higher proportions of farmland in cropland in 1980, but was negatively related to those areas where larger proportions of cropland were in pasture. End of decade employment was not statistically associated with quantity of farmland in any of the models. There are at least two explanations for this result. First, the location of cropland in 1980 may be serving as a proxy for an omitted variable in the model (e.g., cropland may be spatially correlated with other factors contributing to population growth patterns in West Virginia). Second, the implied direction of causation maybe wrong. Growth may be a push factor in the decline of agricultural land, but agricultural land is not a pull factor for growth. We will expand this analysis to look at recursive models and other systems of equations models that better capture the relationships between agricultural land and growth.
Transitioning Economies in Rural Appalachia: Does Wilderness Play a Role?
Randall S. Rosenberger and John Murray
View Paper with Acrobat Reader (pp. 41, 655KB)
Abstract: This project investigates the negative and/or positive impacts of wilderness designation on rural counties in the Appalachian Region of the U.S. using a broad longitudinal dataset. Location quotients, as measures of relative shares of economic sectors in a county, are calculated for all economic sectors in all rural counties from 1969 to 1999. Several random effects trend models with first-order autocorrelation are used to test hypotheses regarding the impacts of wilderness designation. Several significant results suggest there is a difference between wilderness counties and other designated county types in rural Appalachia. However, what role wilderness actually played as a catalyst in the development of local economies is uncertain.
Recreational Opportunities and Health Status in West Virginia
Randall S. Rosenberger, Yoav Sneh, and Tim Phipps
Research Paper #2002-6
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Abstract: Over half of all Americans are considered to be physically inactive and/or obese, leading to significant individual and societal costs. This study investigates the link between recreational supply and health status for West Virginia. Using spatial econometric techniques, we show that the demand for health care is positively associated with physical inactivity rates, and that physical inactivity rates are inversely related to the supply of recreational opportunities. When promoting the importance of physical activity as preventative health care, policy makers should consider the provision of recreational opportunities as a means to overcome sedentary behaviors.
Parametric and Non Parametric Testing for Income Convergence
James O. Bukenya,
Tesfa Gebremedhin and Peter V. Schaeffer
Research Paper #2002-5
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Abstract: This paper examines the degree to which per capita incomes have converged across counties in West Virginia over the last thirty years. The increase in government transfers and, possibly, other government assistance programs would suggest that incomes in spatially dispersed regions/counties within nation-state should become similar over this period. However, the interrelation between business cycles, migration, employment structure and changes in per capita earnings over time reduces this possibility. Comparable county data are obtained for two dissimilar regions: southern and eastern panhandle. The empirical results differ across the different measurement techniques used, but in general, the findings concur with the conclusions reached by previous studies that the convergence observed in earlier decades was replaced by divergence in the 1980s.
Race, Migration, and the Social Welfare System during the 1950s and 1960s: How Research can Mislead the Public Debate
Brian J. Cushing
Research Paper #2002-4
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Abstract: A large body of empirical research has concluded that, at least during the 1950s and 1960s, the effect of welfare benefits on migration differed significantly by racial group, with blacks being attracted by and whites repulsed by areas that provided high welfare benefits. This study revisits the issue of racial differences in attractiveness to interregional differences in welfare benefits, using data from the U.S. Census of Population and a simultaneous equation model of state-to-state migration that accounts for a variety of economic, amenity, and spatial factors. In contrast to most previous empirical work, there is no statistically significant evidence that either origin or destination AFDC benefits affected migration during the 1965-70 period. The analysis indicates that conclusions regarding the influence of interregional differentials in welfare benefits on migration can be very sensitive to specification of the migration model. A carefully specified model estimated using an appropriate econometric methodology, however, will yield robust results. This is critical to understand given the renewed interest in this policy issue as a consequence of the current decentralization of the welfare system.
Competition and Complementarity in Local Economic Development: A Nonlinear Dynamic Approach
Richard Healy and Randall W. Jackson
Research Paper #2002-3 is replaced by an article reprinted in Studies in Regional and Urban Planning 9: 21-49 (accepted in 2002, in print in 2003, dated 2001).
Abstract: Competition for local economic development has increased dramatically in the past 20 years. This competition is in many cases extremely costly to states and communities, while the benefits are uncertain. If regions whose economic fortunes are complementary could work with instead of against one another, costs of competition could be eliminated, while returns to economic development investments could be enhanced. This paper presents a method by which the underlying spatial economic relationships among areas within a region can be identified. Economic development policy can then be guided by the identification of the competitive or complementary links that exist among areas. The Dendrinos-Sonis (DS) model of relative social spatial dynamics is used to determine these relationships, in aggregate and on an industry-by-industry basis, in the Cincinnati metropolitan region. Sets of competitive and complementary region pairs are identified.
Price Convergence on World Commodity Markets: Fact or Fiction
James O. Bukenya and Walter C. Labys
Research Paper #2002-1
View Paper with Acrobat Reader (pp. 40, 288KB)
Abstract: Recent attention to the use of commodity market derivatives as a vehicle for reducing the price risks of commodity exporting developing countries has renewed interest in the behavior of primary commodity prices separated by space. For some time a common belief has existed that commodity prices have converged over the last several decades on world markets. Increases in communications, central bank activities and globalization are cited as reasons as to why prices in spatially dispersed markets should become closer. However, the interrelations between business cycles and price instability are likely to reduce this possibility. To analyze this hypothesis, we utilize measures of market integration, regression, cointegration and impulse function analysis. Comparable geographic data have been compiled for six commodities: coffee, cotton, wheat, lead, copper and tin. The empirical results do not support the convergence hypothesis, but rather a pattern of fluctuating coherence.
Comparing Three Spatial Cluster Tests from Rare to Common Spatial Events
Working Paper #2001-24
(pp. 24, 228K)
Abstract: In the past few years, several new tests for spatial clustering have been proposed. With ever increasing capability of GIS and wider availability of spatial statistic functions, spatial analysts are likely to face challenge of properly using these tests. Seemingly gaps also exist between the development of new tests and follow up evaluations against various assumptions. In this research note, I compare three cluster tests along a range of distribution from rare to common spatial events. The results not only revealed sensitive data feature that each test is designed to detect, but also clarified the interpretation based on the nature of the test.
Quality of Life Satisfaction: A Comparative Survey Analysis of the Eastern Panhandle and Southern West Virginia Counties
James Bukenya and Tesfa G. Gebremedhin
Working Paper #2001-20
(pp. 21, 300 KB)
Abstract: The main objective of this paper is to analyze and report quality of life survey responses from a random sample of over 1028 individuals from 21 counties in West Virginia. The survey responses are drawn from a quality of life survey conducted in 2000. Perhaps the most interesting observation from the responses was not that differences exist among counties but that, in all counties, the level of satisfaction was remarkably high (over 50%). Only small fractions of individuals were explicitly dissatisfied, surprisingly in counties with the highest growth levels in per capita incomes.
Socioeconomic Trends in Mining Dependent Counties in Appalachia
Melissa Latimer and F. Carson Mencken
Working Paper #2001-17
View Paper (pp. 28, 1,010 KB)
Abstract: Not available.
Reading Changes in Family Support through Regional Development in China
Working Paper #2001-16
(pp. 25, 628 KB)
Abstract: This article examines the degree to which the traditional family support system would be reshaped by the modernization and industrialization from a geo-developmental perspective. In particular, we examine the impact of rapid social changes and economic developments on family support for older parents in contemporary urban China to assess trends that might lead to a different path from the western style of old-age support purported by modernization theory. Based on the 1992 Survey on China’s Support Systems for the Elderly, the study divides the sample from three levels of economic development, which in turn, are used as proxies for developmental trends. It finds that intergenerational support in urban China is persistent as far as instrumental support is concerned, and the level of support follows a U-shaped pattern along the level of economic development. It is the mid-developed urban areas that intergenerational support seems the weakest. If the pattern from less-developed to developed-urban areas reflect a developmental path, then the trajectory seems to correspond to our expectations. The beginning and developed stage represent a transitional period during which rapid urbanization processes and greater geographic separation between parents and adult children often leads to weakened intergenerational support for the elderly. The study concludes that although the old age support system, on the whole, in China will diverge from the path of the West, some aspects of economic support to the elderly will likely be consistent with modernization theory.
An Integrative Hierarchical Framework for Environmental Valuation: Value Pluralism, Thresholds, and Deliberation
Randall S. Rosenberger
Working Paper #2001-14
View Paper (pp. 40, 132 KB)
Abstract: When assessing people’s values for the natural environment, a variety of methodological approaches may be required. This is because value pluralism negates the ability to reduce the various kinds of values to a single conception of value or super-value. Environmental valuation endeavors are defined by the question to be answered. However, for some people, the methodology employed may conflict with their perception of the issue and what values are most important to them, i.e., the methods employed are not globally incentive compatible with all modes of expressing one’s values. Therefore, any single disciplinary approach to environmental valuation may ignore these most important values, or restrict, in an unacceptable fashion, a person’s ability to express her values. No single disciplinary valuation methodology is necessary and sufficient for providing information regarding all of the values confronted in environmental decisions. In recognizing a plurality of values comes the realization that each disciplinary approach to valuation is bounded by its theoretical assumptions. A comprehensive environmental values assessment must be multi-disciplinary in scope.
An integrative hierarchical framework for environmental values is proposed (figure 1). The hierarchy is based on the notion of a prepotency of certain kinds of values over others leading directly to the use of a plurality of decision strategies. The different value levels in the hierarchy are constructed from the role of thresholds, or non-compensatory evaluations, of environmental issues. By approaching environmental problems with an awareness of a plurality of values, decision-makers may be more tolerant toward multi-disciplinary endeavors, resulting in better management and policy that is balanced, democratic, and holistic. A democratic process is suggested to deal with competing value claims and evaluate management and policy, which also promotes an environment in which concerned individuals can adapt to, evolve with, and learn from continually changing circumstances. Environmental management should be pluralistic in philosophy, pragmatic in practice, and contextual in process. Several topics are discussed for potential future research.
Rationality, Decision Theories, and Thresholds: Implications for Environmental Valuation
Randall S. Rosenberger
Working Paper #2001-13
View Paper (pp. 44, 135 KB)
Abstract: The purpose of this paper is to promote a discussion about different theories of rationality and models of individual decision making, as well as the role of thresholds in the valuation of environmental management and policy issues. The intent of this paper is to provide some conceptual distinctions between models and theories in order to develop experiments that empirically test one or more of the issues raised herein.
Dispositions for Lexicographic Preferences of Evironmental Goods: Integrating Economics, Psychology, and Ethhics
Randall S. Rosenberger, George L. Peterson, Andrea Clarke, and Thomas C. Brown
Working Paper #2001-12
View Paper (pp. 36, 195 KB)
Abstract: This paper combines the psychometric methods of paired comparisons and environmental disposition measurement to explain seemingly lexicographic behavior in choice experiments. A paired comparison experiment is developed that measures economic values using a choice set composed of public goods, private goods, and sums of money. The method provides a detailed map of each respondent’s stated preferences, among the choice set elements. Two treatments are used that differ only on the range of the dollar magnitudes – Treatment A ranges from$10 to $700. Treatment B ranges from $10 to $9,000. In either treatment, a proportion of the respondents potentially exhibit lexicographic preferences. The Environmental Response Inventory is used and supplemented with statements regarding environmental ethics issues. Nine disposition scores are calculated for each respondent. Dispositions of pastoralism, antiquarianism, and environmental ethicism tend to correlate positively with increasing preferences for environmental goods, while the disposition of environmental adaptation tended to negatively correlate with preferences for environmental goods. The marginal effects of environmental dispositions were largest for people that did not value environmental goods highly (low valuers) and those that potentially valued the goods lexicographically. The results lend support to the conclusion that people who tend to hold deontological ethical stances toward the natural environment tend to use non-compensatory decision rules when expressing their values.
Growing the Economy of Clay Country through Industry Targeting: A Preliminary Analysis
David W. Hughes and Steven N. Zaricki
Working Paper #2001-8
(pp. 30, 134 KB)
Heterogeneity and Chaotic Dynamics in Commodity Markets
Catherine Kyrtsou, Walter C. Labys, and Michel Tarraza
Working Paper #2001-7
(pp. 23, 149 KB)
Abstract: The nonlinear testing and modeling of economic and financial time series has increased substantially in recent years, enabling us to better understand market and price behavior, risk and the formation of expectations. Such tests have also been applied to commodity market behavior, providing evidence of heteroskedasticity, chaos, long memory, cyclicity, etc. More recently the evaluation of empirical financial models suggests that chaotic structure in asset prices can result from the heterogeneity of trader’s expectations. The present evaluation of futures price behavior confirms that the resulting price movements can be random, suggesting noisy chaotic behavior. The root cause of this behavior is the endogenous forces in the market, i.e. the interactions between heterogeneous investors. Thus, prices could follow a mean process that is dynamic chaotic, coupled with a variance that follows a GARCH process. Our conclusion is that models of this type could be constructed to assist in forecasting prices over short run but not over long run time periods.
Site Correspondence Effects in Benefit Transfers: A Meta-Analysis Transfer Function
Randall S. Rosenberger and Tim T. Phipps
Working Paper #2001-6
View Paper (pp. 42, 236 KB)
Abstract: Several factors can affect the validity and reliability of benefit transfers. This paper proposes the existence of meta-valuation function and uses meta-regression analysis to estimate this function. The meta-valuation function controls for systematic effects of differences in sample and site characteristics on the magnitude of error associated with an experimental benefit transfer. Validity measures are derived through various specifications of multi-site and single-site travel cost demand models for hiking on a variety of trails in Colorado. The results show that some characteristics account for a large portion of error in the benefit transfer application. When the meta-regression analysis function is adapted for benefit transfer estimation, it results in more accurate and reliable transfer measures than traditional methods.
Towards an Understanding of Types of Public-Private Cooperation
Peter V. Schaeffer and Scott Loveridge
Reprinted in Public Performance and Management Review, 26,2:169-189, 2002
Abstract: Governments frequently join forces with private organizations. The focus of this article is on characteristics of sustained cooperative efforts that require a significant commitment of resources over an extended period. The authors observe that cooperators’ expected rewards and risks may influence the form voluntary cooperation will take. This article classifies public-private cooperation into four common forms and provides a conceptual framework for better understanding why cooperators choose a particular form of cooperation.
Formal and Informal Recruitment of College Graduates: Policy Implications in West Virginia
Brian Lego, Tesfa G. Gebremedhin, and Kerry Odell
Working Paper #2001-4
(pp.24, 106 KB)
Abstract: A multinomial logit was the primary econometric model used to examine the importance of West Virginia’s higher education institutions as a source of skilled employees for the state’s private sector. The study confirmed that the analysis of descriptive statistics and empirical results have numerous applications in decision making and policy programs.
Disability Legislation: An Empirical Analysis of Employer Cost
Beth A. Loy and Tesfa G. Gebremedhin
Working Paper #2001-3
(pp. 17, 57 KB)
Abstract: As U.S. civil rights legislation, Title I of the Americans with Disabilities Act of 1990 (ADA) was created to eliminate workplace discrimination on the basis of disability. Using the United States as an example, this research analyzes the potential for disability legislation to laden employers with excessive cost burdens, specifically expenses from additional workplace injuries and illnesses. In addition, this study looks at the likelihood that employers compensate for these costs by cutting workplace sick leave benefits. Prior to the ADA’s implementation, U.S. employers had the fear of incurring excessive cost. The paper successfully counters this fear by looking first at whether the legislation spawned significant increases in the incident rates of occupational injuries and illnesses, and second, whether employers compensated for soaring compliance costs by decreasing paid sick leave benefits.
Seasonality, Nonstationarity and the Structural Forecasting of the Index of Industrial Production
Eugene Kouassi, Walter C. Labys, and Francois B. Aka
Working Paper #2001-2
(pp,. 38, 130 KB)
Abstract: In this paper we focus on two ‘STS’ models suitable for forecasting the index of industrial production. The first model requires that the index be transformed with a first and seasonal difference filters. The second model considers the index in its second difference filter, while seasonality is modeled with a constant and seasonal dummy variables. Tests designed to discriminate empirically between these two models are also conducted. Our results prefer the performance of the second model, particularly when the conventional ML estimation procedure is replaced by the ALS procedure. This process together with appropriate seasonal adjustment advances the possibility of using the suggested index forecasts to help to predict business cycle turning points.
Environment and Trade: A Review of Issues and Methods
Haixiao Huang and Walter C. Labys
Reprinted in the International Journal of Technology and the Environment, 2,1/2:100-160, 2002
Abstract: This survey attempts to provide an overview of the major issues concerning economic interactions between environmental and trade policies. Such a review is necessary because of the pressure that the accelerated pace of globalisation is placing on environment and trade. Not only is world trade increasing rapidly but global industrialisation related to trade has spawned severe environmental degradation. As a consequence, growing numbers of researchers have attempted to analyse the linkages between these areas. This study attempts to provide a perspective on received and future research by employing a dual approach economic studies of the major environmental and trade issues are analysed first and then progress in the methods necessary to analyse their interactions is assessed second. The conclusions suggest new possibilities for research design and policy goals.
Applying A Method of Paired Comparisons to Measure Economic Values for Multiple Goods Sets
Randall S. Rosenberger, George L. Peterson, and John B. Loomis
Reprint in the Journal of Agricultural and Applied Economics, 34,1:215-229, 2002
Abstract: A method of paired comparisons is adapted for use in estimating economic measures of value. The method elicits multiple binary choices for paired items in a choice set. Probability distributions and economic values are estimated nonparametrically and parametrically. The method is applied in an experimental context with a choice set composed of four private goods and several sums of money. The sample’s median value estimates for the goods are generally not different than the market prices for these goods. People who are in the market for a good value it higher than those not in the market for the good.
A Comparison of Survey and Non-Survey Methods for Estimating County-level Demand for Educational Attainment
Christiadi and Scott Loveridge
Working Paper #2000-2021
(pp. 58, 286 KB)
Abstract: The implementation of the Workforce Investment Act of 1998 increases the relevance of methods such as that proposed bo Goetz and Debertin for estimating demand for educational attainment at county level utilizing secondary data. The method focuses the analysis on the demand of private businesses, and makes possible a simple forecast of future demand. The final estimates obtained by the method impose distributions of educational attainment demanded by private businesses in a county. This study compares the distributions with survey-based results. The paper focuses on two assumptions adopted by non-survey method: (1) fixed proportions of occupations per sector and (2) fixed proportions of educational attainment per occupation. The study found evidence that differences in the distribution of businesses by size and by sub-sector across counties might play role in determining the final demand. The non-survey method does not yet take this matter into account. There are indications that proportions of input might change over time, so it might be necessary for the non -survey method, especially when estimating the demand of years away from the decennial census years, to use data sets that are made available annually, such as Current Population Survey, rather than Census. Another important finding is the early evidence that certain occupations in different sectors might demand for different composition of educational attainment. This suggests that it might be necessary, in the future, for the non-survey method to redefine its second assumption. The study also finds West Virginia’s occupational distribution to be substantially below the national average for top-level occupations, a hint that the state may be under investing in education. Firms also indicated a real need for more computer training.
County-Level Determinants of the Rate of New Firm Formation in West Virginia
Working Paper #2000-2015
(pp. 19, 70 KB)
Abstract: This paper analyzes county-level variations in new enterprise formation in the State of West Virginia 1993-1998 using data from the County Business Patterns Economic Profile and the American Business Disk. Two econometric models are used. The first model considers differences among the 55 counties, while the second model focuses on differences among counties and among the 9 SIC sectors. The purpose of the models is to identify a range of key determinants for the creation of new firms. The choice of variables is based on previous theoretical and survey research. The dependent variable in both models is the rate of new firm formation. The explanatory variables are chosen using demand and supply considerations. On the demand side, changes in population and income are significant. Variables that affect the cost of the firm and market concentration are significant on the supply side. The intuition about both sets of variables may be that giving relevant information to the firms regarding expected profit might be important in designing incentive programs.
Population Change and the Contextual Nature of Crime in Nonmetropolitan Counties
Cynthia Barnett and F. Carson Mencken
Working Paper #2000-2014
(pp.40, 374 KB)
Abstract: This research explores violent and property crime rates in nonmetropolitan counties. Nonmetropolitan counties are argued to have lower crime rates because of higher levels of social integration. We test the hypothesis that predicators of crime in social disorganization and other macro-structural theories of crime (such as poverty rates, female headed household rates, income inequality, and racial composition) have different effect on violent and property crimes at different levels of population stability. Utilizing the FBI UCR data from 1989-91, we predict the 1989-91 average violent and property crime rates for nonmetropolitan counties. Using an MLE spatial lag regression model, the results show that a factor analyzed index of resource deprivation (poverty rate, income inequality, percent nonwhite, percent non graduating from high school, percent female headed households) has conditional effects on both violent and property crime in non metropolitan counties. Contrary to expectations, the results show that resource deprivation has a greater positive effect on both violent and property crimes in nonmetropolitan counties that lost population between 1980 and 1990. We failed to replicate the interaction effects for metropolitan counties. Implications for theory and research are discussed.
Choosing the Discount Rate: A Fairy Tale
Thoms F. Torries
Working Paper #2000-2013
(pp. 9, 31 KB)
Abstract: A tale involving a Prince, his wizard, a bargaining magical frog, the wise old rabbit, and the Prince’s neighboring rulers illustrates a number of known and less well known hazards in choosing the discount rate for evaluating investments. The tale reveals a new twist to the determination of the actual value of the opportunity cost of capital that involves deviations in estimated project value caused by the profession inability of forecasters, evaluators and decision makers.
Application GIS in Ecotourism Development Decisions: Evidence from the Pearl of Africa
James Obadiah Bukenya
Working Paper #2000-2012
(pp. 30, 1,349 KB)
Abstract: This study demonstrates the uses of geographical information system (GIS) and multi-criterion decision-making framework (MCDM) in solving a spatial multi-objective problem of ranking and prioritizing Uganda’s national parks for ecotourism development. The ranking model adopted allows formal analysis of the effects of alternative weighting schemes and their spatial sensitivity on national park ranking. The results show that (1) Uganda’s national parks can be arranged and ranked into three sub-groups, and (2) the national parks in the western region of the country are ranked higher than those in the other regions.
A Behavioral Approach to Understanding Local Leader Incentives in Economic Development
Working Paper #2000-2007
(pp. 13, 47 KB)
Abstract: This paper sets forth a taxonomy of local economic development practitioners and develops some rationale for explaining the forces that motivate different types of local economic development policies.
Globalization, Oil Price Volatility, and the U.S. Economy
Walter C. Labys
Working Paper #2000-2006
View Paper (pp. 25, 97 KB)
Abstract: The rise of economic globalization has made us more aware of world financial crises and their rapid transmission from one country to another, largely due to the accelerated speed of global communications. Regional financial crises such as those stemming from the European monetary grid breakdown in 1992, the currency devaluation in Mexico in 1995, the Asian recession beginning 1997, and the Russian default in 1998 have become more frequent and their domestic economic impacts have grown. While such crises can arise from fluctuations in foreign exchange and stock markets, economic instability can also result from volatility in world primary commodity markets. Of most recent importance have been the crude oil market crises including the Arab production embargo in 1973, the fall of the Shah of Iran in 1979, and the Iraqi invasion of Kuwait in 1990. Since 1999, OPEC has repeated its effort to cycle prices upwards. The previous oil price jumps led to higher energy prices and eventually to the severe recessions of 1975 and 1980-82 in the US. This paper attempts to examine the importance of commodity markets, to trace the influences of globalization on these markets, to focus on the crude oil market as a source of volatility including its impacts on the US economy, and to explore oil market stabilization possibilities that could reduce these impacts.
A Human Development Index for West Virginia Counties
Alison Chisholm Hanham, Sam Berhanu, and Scott Loveridge
Working Paper #2000-2005 (pp. 18, 162 KB) Slide Show Presentation (pp. 26, 176 KB)
Abstract: West Virginia is a great place to live. If you had your choice of living anywhere in the state, where would you live? Where would your quality of life be the highest? How would you choose where to locate? Would your decision be based strictly on where you could find the highest paying job or would you also consider the other non-market, social and environmental factors that might enable you to enjoy a long, healthy, and creative life? Using the United Nations Human Development reports as a model, this paper represents a first step in developing a way of assessing human development and quality of life at the county level in West Virginia.
Estimating Employer Demand for County Level Educational Attainment: A Case Study of Taylor County, West Virginia
Working Paper #2000-2004
(pp. 25, 168 KB)
Abstract: This is an on going study, examining a method proposed by Goetz and Debertin on how to estimate demand f0r educational attainment as county level utilizing secondary data. This study found that the method is potentially a powerful one. The method produces compact information on the types of employees’ educational attainment demanded by employers, and how they relate to the types of occupations and sectors. This output allows people to see, for instance, how skills requirement (indicated by educational attainment) for the same occupation differs when the demand comes from different sectors. The method also gives a better way to assess the kinds of training needed for the workforce. This method, however, works under two main assumptions: (1) a fixed proportion of types of education required per individual occupation, regardless of the sectors, and (2) a fixed proportion of types of occupation required per individual sector. Whether these assumptions are reliable remains to be seen. The study will conduct a primary data survey to examine that.
The Effect of Wage Differentials and Regional Job Growth on Migration: A Case of West Virginia
James Obadiah Bukeny, Peter V. Schaeffer and Tesfa G. Gebremedhin
Working Paper #2000-2003
(pp. 14, 43 KB)
Abstract: Empirical investigation into the strength of the effect of wages, taxes, and job growth on migration has mirrored theoretical developments. In the early empirical literature, the primary explanatory variables were average wage and unemployment rates while in recent literature these variables have been replaced by more individual-specific variables. Unfortunately, and maybe inescapably, empirical research on the effects of wages, taxes and job growth on migration is confounded by the interconnectedness of these variables. This paper broadens the existing evidence regarding migration by focusing on wage and job growth differences on county level. The results reveal a persistent asymmetry pattern whereby destination economic conditions exhibit the hypothesized effects more than do origin conditions. The implications of these findings are that: (a) conditions at destination influence decisions to relocate more than conditions at origin, (b) workers are found to respond to improved earnings opportunities.
An Empirical Analysis of Family Income Distribution in the United States
James O. Bukenya and Tesfa G. Gebremedhin
Working Paper #2000-2002
(pp. 18, 110 KB)
Abstract: The study examined the short-term and longer-term cyclical influence of family income inequality in the United States. The results indicated that the deterioration of labor market conditions for males versus females; lower wages for rural versus urban jobs; and industrial versus non-industrial jobs accounted for an increase in income disparities between families in the United States.
Market Transition and Regional Adjustments in the Polish Coal Industry
Wojciech Suwala and Walter C. Labys
Reprinted in Energy Economics, 24,3:285-303, 2002
Abstract: The Polish coal industry has been undergoing restructuring to provide for its transition to a competitive environment. The coal industry has responded by attempting to downsize its capacity, to increase exports, to reduce employment and to increase productivity. In facing the challenges of the impacts of stronger environmental regulations, the industry has also been forced to consider regional adjustments in different districts of Poland. These kinds of transition difficulties warrant the formulation of a modeling approach that would analyze regional restructuring policies. This paper presents the results of a spatial equilibrium optimization approach that has been designed to meet this need. The modeling framework consists of two-coupled programming models. The first model explains coal production and investment and analyzes decisions related to the closures of unprofitable mines, the construction of new mines in different locations, and the installation of beneficiation equipment and emissions reduction equipment. The second model evaluates coal demand regional distribution patterns based on a spatial equilibrium optimization procedure. The two models are operated sequentially to analyze several scenarios that describe the evolution of the Polish coal market through its recent and future transitions.
Measuring the Impacts of Health Care on
Rural Counties: Hospitals and Clinics in Preston County
Working Paper 9912
view paper (pp. 22, 101 KB)
Abstract: Quality health care systems are important to a community’s health interests, but they also play an important role in a community’s economic vitality. This paper reviews some
contemporary challenges facing rural health care systems due to changes in the health care industry, the health insurance industry, the national economy, and reforms of social benefit
programs. Using Preston County, West Virginia as a case study, the paper illustrates the link between rural economic vitality and quality, accessible healthcare systems. Furthermore, this
paper demonstrates the need for active community involvement in local health care decisionmaking processes. It also provides a variety of methods that can be used to measure the economic impacts of health care systems in a rural county using the IMPLAN input-output program using Preston County hospitals and clinics as a case study.
Using GIS to Identify High Value Areas in Large Coal Resources
Thomas F. Torries and Jeffrey Kern
Working Paper #9911
view paper (pp. 10, 584 KB)
Abstract: Identifying high value areas of unmined coal when large quantities of coal are available relative to annual markets is difficult because of the uncertainty of when the coal is to be mined. A GIS based methodology developed to value reserve coal in a producing coal region for the purpose of ad valorem taxation also identifies high value areas for mining investment. The methodology is unique in that it accounts for most mining, environmental, and market factors to determine when specific properties are to be mined The methodology and database are useful for directing regional exploration and acquisition activities toward most favorable areas.
High School Dropouts: Implications in the Economic Development of West Virginia
Semoa C.B. De Sousa and Tesfa Gebremedhin
Working Paper # 9909
View paper (pp. 18, 54 KB)
Abstract: An ordinary least squares (OLS) regression method was used to evaluate the relative importance of high school dropout rates and other economic factors that could explain the economic development in West Virginia, as represented by the employment rates. The empirical results revealed that an increase in the high school dropout rates and the State GDP increased the employment rates while the increase in unemployment compensation decreased employment rates. Thus, the increase in the employment rates may likely be on unskilled and low paying jobs.
A Multi-Sector Export Base Model of Long-Run Regional Economic Growth
Brian Lego, Tesfa Gebremedhin, and Brian Cushing
Reprinted in the Agriculture and Resource Economics Review, 29,2: 192-197, 2000
Abstract: The relationships between intersectoral export and local employment and regional economic growth are analyzed in a long-run equilibrium framework. Dynamic location quotients decompose regional employment into export and local components for multiple sectors. Johansen’s Full-Information Maximum Likelihood (FIML) approach is used to identify the existence and resultant rank of the co-integrating relationship between sectoral export and local employment in West Virginia’s four metropolitan areas. Empirical results indicate inter-sectoral basic and non-basic employment form a co-integrating system of equations. Furthermore, this analysis shows that inter-sector shocks to local and export employment may cause multipliers to be positive or negative in magnitude.
Training Needs of Affordable Housing Nonprofits: How to Develop “Better Total Management”?
G. Stevenson Smith
Working Paper #9906
view paper (pp. 23, 101KB)
Abstract: The following report analyzes the data collected from two surveys as that data relates to the training needs of affordable housing non profits (AHN). The first survey was administered in March to nonprofit managers attending a seminar in Charleston. The second survey is a collection of audio taped phone interviews with the executive directors of 28 AHNs conducted in July. The purpose of both surveys was to collect data about the training needs of AHNs in the State of West Virginia. In addition the first survey collected background information about business practices, funding sources, and computer/software usage. Although the first survey collected valuable information about training needs, it was felt after a review that the training needs of the AHNs could be better identified through a series of open-ended interview questions with executive directors at AHNS.
Relocating Gender and Rural Economic Strategies
Reprinted in the Journal of Environment and Planning A, 34,7: 1221-1237, 2002
Abstract: In recent decades, increasing entrepreneurial activities among women have contributed to shifting livelihood strategies at the household, community, and regional scales. In this paper I examine home based work in an economic network to highlight the intersection of gender and economic practices in rural Appalachia. The research demonstrates that these livelihood strategies both construct and are shaped by dynamic material conditions and social processes in place. Economic restructuring in the central Appalachian region has led to the reworking of economic strategies, despite a continued reliance by households on homework and informal activities. The case study for this project as an economic network comprised of sixty home-based workers who produce knitwear for regional and national markets. In-depth interviews and extensive fieldwork are used to examine the complexity of shifting economic livelihoods in the rural Appalachian context. The analysis focuses on the (re)negotiation of gender identities by home-based workers in the context of economic restructuring. The discussion also shows how participation in these activities contributes to economic and social empowerment. Overall, this study offers a critical approach to the economy, work, and gender in a way that analyzed diverse economic practices and the construction of gender identity in a rural, economically marginalized region.
The Origins of Devolution: A Speculative Note
(pp. 8, 27 KB)
Abstract: Why is devolution gaining strength both in the United States and in other highly developed countries? This note looks at broad social and economic trends that may be contributing to the movement toward more local control of government operations. Among the points discussed are: the end of the cold war; the information age, the booming economy, the increasing globalization of the economy, the rise of the south; and society’s increased understanding of environmental issues. A concluding section comments on what it all means for regional scientists.
Abstract: We explore how poverty differs between urban and rural areas and among U.S. regions, using metropolitan versus nonmetropolitan to proxy urban versus rural. Our study focuses on social and demographic characteristics, rather than economic characteristics. We are concerned with which personal characteristics appear to increase the risk of poverty, regardless of whether these characteristics manifest themselves through unemployment, low-wage employment, or some other economic problem that ultimately leads to poverty. Using data for the working-age population from the one percent Public Use Microdata Sample of the 1990 Census of Population and Housing, we find significant differences in predictors of poverty across area types and regions. Our empirical results suggest that anti-poverty programs should vary across area types and regions in order to meet the unique needs of each location’s low-income population.
Violent Crime, Homicide and Spatial Autocorrelation in Mid-Southern Counties
F. Carson Mencken and Cynthia Barnett
Working Paper #9902 (pp.19, 685 KB)
Abstract: In this paper we explore to what extent murder and violent crime rates in the mid-South are spatially autocorrelated with a variety of county-level spatial association measures. The analysis shows that while statistically the murder and violent crime rates in the mid-Southern counties are spatialy associated, the degree of clustering among these counties is minimal-especially when compared to clustering among the significant predictors of violent crime (percent black, female headed households, percent in poverty, etc.). The analysis has important implications as to how county violent crime rates are being modeled.
Gendered Livelihood Strategies in Rural South Africa and Appalachia
Ann M. Oberhauser
Working Paper 9814
view paper (pp. 15, 99 KB)
Abstract: This paper examines the contextual nature of gendered livelihood strategies through a comparative study of rural women’s producer groups in former homelands of South Africa and Appalachia. This comparative approach situates gendered livelihood strategies in distinct local contexts that are constituted by specific historical dynamics and cultural relations. Producer groups are defined here as cooperatives, networks, and other collective economic activities that generate income for households and are part of community-based economic strategies. The discussion focuses on the link between socio-economic conditions and gendered livelihood strategies and the economic viability of these producer groups as sustainable income-generating activities, especially in rural areas. The comparison of production and marketing strategies of a sewing group in South Africa and a knitting group in Appalachia reveals similarities, yet important differences that derive from their specific historical and cultural contexts. In sum, this research advances knowledge of gender and rural development by comparing the gendered nature of collective economic strategies in two peripheral regions of the so-called First and Third World.
An Economist’s Perspective on Urban Design
Working Paper #9813
Keys to Engaging Faculty in Service: Lessons from West Virginia’s Community Design Team
Reprinted in Journal of Planning Education and Research, 21,3: 331-339, 2002
Abstract: Fostering faculty participation in scholarly public service activities requires more attention to developing appropriate structures to motivate action. This article highlights several methods of stimulating and maintaining faculty interest in service using an extended example: a university-based planning assistance program for small communities. Creating the necessary preconditions for scholarly public service requires creativity, time, and administrative commitment.
Universities and Regional Economic Development: DoesAgglomeration Matter?
Reprinted in Johansson, Börje, Charlie Karlsson and Roger Stough (Eds.) Theories of Endogenous Regional Growth – Lessons for Regional Policies, Springer, Berlin, 345-367
Federal Spending and Economic Growth in Appalachian Counties
F. Carson Mencken
Reprinted in Rural Sociology, 65,1: 126-147, 2000
Abstract: In this paper I use a model informed by key theories of regional processes, and I test three related hypotheses concerning the effects of different types of federal spending (public investment, defense, salaries/wages) on economic growth in the 399 Appalachian counties during recent business cycles. The analysis incorporates a maximum likelihood estimate spatial lag regression model and shows the federal public investment spending and defense spending exerted net positive effects on per capita income, civilian employment, and private nonfarm employment growth rates between 1983 and 1988. In addition, public investment spending had a positive relationship with percentage of earnings from mining for the 1983-1988 period. Federal spending, however, had less consistent effects during the 1989-1992 recession. Implications for theory and research on regional processes are discussed.
The Notion of Community in Neighborhood Planning Practice
Working Paper #9804 (pp.29, 1,4412 KB)
Local Academic Knowledge Transfers and the Concentration of Economic Activity
Reprinted in the Journal of Regional Science, 40,2: 289-309, 2000
|9802||Attila Varga||Universities in Local Innovation Systems|
|9801||Luc Anselin||Exploratory Spatial Data Analysis in a Geocomputational Environment [reprinted in a book entitled, GeoComputation, a Primer, eds., Paul Longley, Sue Brooks, Rachel McDonnell and Bill MacMillan. New York: Wiley Publishers, 1998 pp. 77-94]|
|9733||Chuck Failing, IV||A Spatial Analysis of Southern Gubernatorial Elections: 1965-1997|
|9734||Victor V. Claar||A Kalman-Filter Approach to Estimating the Natural Rate of Unemployment|
|9732||Brian Cushing||Migration and Persistent Poverty in Rural America: A Case Study from Central Appalachia [replaced by a chapter in a book entitled, Migration and Restructuring in the U.S.: A Geographic Perspective, Kavita Pandit and Suzanne Davies Withers, eds., Rowman & LIttlefield, 1999]|
|9731||Luc Anselin||Rao’s Score Test in Spatial Econometrics [reprinted in Journal of Statistical Planning and Inference]|
|9730||F. Carson Mencken||Social Contacts and Job Searching: Does Gender of Contact Matter?|
|9729||Attila Varga||Regional Economic Effects of University Research: A Survey|
|9728||Shuming Bao and Luc Anselin||Linking Spatial Statistics with GIS: Operational Issues in the SpaceStat-ArcView Link and the S+Grassland Link [reprint in Journal of Geographical Systems 2,3: 287-306, 2000]|
|9727||Josh Masnick Kim and F. Carson Mencken||Household and Local Labor Market Determinants of Economic Well-Being in the State of West Virginia [replaced by a chapter in a book entitled, Inside West Virginia: Public Policy Perspectives for the 21st Century, R. Althouse and B. Keith (eds.). West Virginia University Press, 1999]|
|9726||F. Carson Mencken and James H. Noonan||The Effects of Federal Spending on Earnings Change in Appalachia|
|9725||Emily Talen and Mary Coffindaffer||The Utopianism of Children: An Empirical Study of Children’s Neighborhood Design Preferences|
|9724||F. Carson Mencken||Right-to-Work Laws and Local Economic Change: Recent Evidence from Appalachia” [reprint in Sociological Focus (2000]|
|9722||Brian Cushing||Will Interstate Differences in Restrictions on Receipt of Public Assistance Affect Migration of the Poor? Some Evidence from the Past|
|9721||Andrew Isserman||The National Role in Rural Economic Development: Some Empirical Evidence and Policy Implications [reprinted in Economic Development Quarterly]|
|9720||F. Carson Mencken and Idee Winfield||Employer Recruiting and the Gender Composition of Jobs [reprint in Sociological Focus 31,4: 357-372, 1999]|
|9719||Emily Talen, AICP||Measuring the Public Realm: A Case Study [reprinted in Journal of Architectural and Planning Research 17,4: 344-360, (2000]|
|9718||Laura A. Blanciforti and Edit Kranner||Estimating County Cost of Living Indexes: The Issue of Urban Versus Rural|
|9714||William H. Miernyk||Economic Growth Theory and the Georgescu-Roegen Paradigm [replaced by a chapter in a book entitled, Bioeconomics and Sustainability, K. Mayumi and J. M. Gowdy, Cheltenham (eds.), UK: Edward Elgar, 1999]|
|9712||F. Carson Mencken and Joachim Singelmann||Business Cycles and Socioeconomic Performance in Metropolitan and Nonmetropolitan Economies during the 1980s [reprinted in The Sociological Quarterly 39,2: 215-238, 1998]|
|9711||Anna Falkner||Regional Aspects of Political Party Development in the United States: The Case of Governors, 1789-1824|
|9709||Emily Talen, AICP||Can “Sense of Community” be Built? An Assessment of the Social Doctrine of New Urbanism [reprinted in Journal of Planning Literature 15,2: 171-183, 2000]|
|9708||Emily Talen, AICP||Planning Dollars and Sense: An Analysis of Planning Expenditure in Florida [reprint in Planning Practice and Research 15,4: 343-352, 2000].|
|9707||F. Carson Mencken||Revisiting Socioeconomic Well-Being in Appalachia using Large Sample Spatial Autocorrelation Techniques [reprinted in Sociological Focus 30: 79-97, 1997]|
|9706||Stephen Ellis and Cynthia Rogers||Local Economic Development as a Game: We’re Caught in a Trap, I Can’t Walk Out … [reprint in Review of Regional Studies]|
|9705||Luc Anselin and Harry H. Kelejian||Testing for Spatial Error Autocorrelation in the Presence of Endogenous Regressors|
|9704||Buhong Zheng and Brian J. Cushing||Distribution-Free Statistical Inferences for Testing Marginal Changes in Inequality Indices [reprinted in Journal of Econometrics, 101: 315-335, 2001]|
|9703||Brian J. Cushing||Racial Differences in the Migration Response to Social Welfare Benefits: Revisited [ 2002-4 replaces this working paper]|
|9702||Terance J. Rephann||The Economic and Social Impacts of NIMBYs|
|9701||R. Davidson, W. C. Labys, and J. B. Lesourd||Wavelet Analysis of Commodity Price Behavior [reprinted in Computational Economics 11:103-128, 1998]|
|9631||Emily Talen, AICP||Is More Planning Better? An Exploration of Planning Expenditure in Florida|
|9630||David J. Sorenson||Estimating Bank Lending Risk and Its Effect on Asset Allocation|
|9629||Brian J. Cushing||The Influence of Race Relations on Destination Choices of Black-American Migrants in the United States, 1955-1980|
|9628||Luc Anselin||SpaceStat.apr User’s Guide [replaced by SpaceStat ]|
|9627||Luc Anselin||Interactive Techniques and Exploratory Spatial Data Analysis [reprint in Geographical Information Systems: Principles Techniques, Management and Applications, eds., P. Longley, M. Goodchild, D. Maguire, and D. Rhind. New York: Wiley,1999, pp. 251-264]|
|9624||Andrew Isserman and Kimberly Dinjar Mencken||External Ownership and Bank Lending Behavior: Empirical Evidence Using Control Group Methods|
|9623||Beth Loy and Scott Loveridge||Local Economic Developers’ Preferences for Industrial Recruitment: A Contingent Valuation Approach|
|9622||F. Carson Mencken||Industry Structure and Earnings Growth During National Business Cycles in Appalachia|
|9621||Laura A. Blanciforti||Estimating Interregional Price Indexes: Opportunities and Pitfalls|
|9620||David J. Sorenson, William N. Trumbull, and Christopher Cornwell||Estimating the Economic Model of Crime: Does Space Matter? [reprinted in a book entitled, Readings in Urban Economics Issues and Public Policy, ed. R. W. Wassmer, Blackwell Publishers, 2000].|
|9618||Luc Anselin and Shuming Bao||Exploratory Spatial Data Analysis Linking SpaceStat and ArcView [reprinted in a book entitled, Recent Developments in Spatial Analysis, eds., M. M. Fischer and A. Getis. Springer (1997]|
|9617||Luc Anselin and Anil K. Bera||Spatial Dependence in Linear Regression Models with an Introduction to Spatial Econometrics [reprinted in a book entitled, Handbook of Applied Economic Statistics, eds., A. Ullah and D.E.A. Giles, New York: Marcel Dekker, Inc., 1998, pp. 237-289]|
|9616||F. Carson Mencken and Sally Ward Maggard||Informal Economic Activity in West Virginia: A Descriptive and Multivariate Analysis [reprint in Inside West Virginia: Public Policy Perspectives for the 21st Century, eds. R. Althouse and B. Keith. West Virginia University Press,1999].|
|9615||Luc Anselin||Spatial Data Analysis Workbook Using SpaceStat and ArcView|
|9614||F. Carson Mencken and Idee Winfield||Organizational Assessment of the Advantages and Disadvantages of Informal and Formal Recruiting Practices in External Labor Markets [reprinted in The American Journal of Economics and Sociology 57,2: 135-153, 1998]|
|9613||Luc Anselin||GIS Research Infrastructure for Spatial Analysis of Real Estate Markets [ reprint in Journal of Housing Research 9,1: 113-133, 1998]|
|9612||James J. Friedberg||Views of Doñana [reprintd in The Columbia Journal of European Law 3,1: 1-48, 1996-97].|
|9610||Emily Talen, AICP||The Social Equity of Urban Service Distribution: An Exploration of Park Access in Pueblo, CO and Macon, GA|
|9607||Terance Rephann, Margaret Dalton, Anthony Stair, and Andrew M. Isserman||Casino Gambling as an Economic Development Strategy [reprint in Tourism Economics 3,2: 161-183, 1997]|
|9606||Luc Anselin, Attila Varga, and Zoltan Acs||Local Geographic Spillovers Between University Research and High Technology Innovations: A Spatial Econometric Approach [reprint in Journal of Urban Economics 42,3: 422-448, 1997]|
|9605||Brian J. Cushing||Model Specification and the Robustness of Empirical Results from Migration Models|
|9604||Brian Cushing and Buhong Zheng||Reevaluating Differences in Poverty Among Central City, Suburban, and Nonmetropolitan Areas Using Distribution-Sensitive Poverty Measures [reprinted in Applied Economics 32: 653-660, 2000]|
|9603||Emily Talen and Luc Anselin||R Assessing Spatial Equity: The Role of Access Measures [reprinted in Environment and Planning A 30,4: 595-613, 1998]|
|9602||W. C. Labys and E. Kouassi||Structural Time Series Modeling of Commodity Price Cycles|
|9532||Cynthia Rogers, Kimberly Mencken, and F. Carson Mencken||Female Labor Force Participation in Central Appalachia: A Descriptive Analysis [reprinted in the Journal of Appalachian Studies 3,2: 189-210, (1997]|
|9531||Carson Mencken||Job Matching, Recruitment, and Information in External Labor Markets: An Assessment of Neoclassical Models|
|9530||Stephan Weiler||Regional Restructuring and Local Labor Markets|
|9527||Brian Cushing||Poverty in Central Appalachia: People Versus Place|
|9526||F. Carson Mencken||Regional Differences in Socio-Economic Performance in Appalachia During the 1980s [reprinted in Sociological Focus 3,1: 79-97, 1997]|
|9525||Timothy A. Warner and Michael C. Shank||Spatial Autocorrelation Analysis of Hyperspectral Imagery for Feature Selection [reprinted in Remote Sensing of Environment 60: 58-70, 1997]|
|9524||Emily Talen||Success Vs. Failure in Planning Practice: Alternative Perspectives [reprinted in Environment and Planning B 4: 573-587, 1997]|
|9523||Kimberly Mencken, Cynthia Rogers, and F. Carson Mencken||Female Labor Force Participation in Central Appalachia: A Logit Analysis [reprinted in the Journal of Appalachian Studies 3,2: 189-210, 1997]|
|9522||Emily Talen||Visualizing Fairness: Equity Maps for Planners [reprinted in the Journal of the American Planning Association 64,1: 22-38, 1998]|
|9521||Carl M. Selinger||Public Interest Lawyering in Mexico and the United States [reprinted in Inter-American Law Review 27,2: 343-360 1996]|
|9520||Rodney A. Erickson, Samuel X. Lowe, and David J. Hayward||Appalachian Competitiveness in a Global Economy: Industrial Exports and Exporter Establishments, commissioned by the Appalachian Regional Commission|
|9618||Cynthia L. Rogers||Expectations of Unemployment Insurance and Unemployment Duration [reprinted in Journal of Labor Economics 16,3: 630-666, 1998]|
|9517||Laura A. Blanciforti and Edit Kranner||Indirect Methods for Estimating County Cost of Living Indexes|
|9514||Stephan Weiler||The Economics of the Struggling Structurally Unemployed|
|9513||Andrew M. Isserman||The Evolving Appalachian Economy, commissioned by the ARC|
|9512||Luc Anselin||Spatial Patterns in Appalachian Growth and Development: A Report to the Appalachian Regional Commission|
|9511||Brian Cushing and Cynthia Rogers||Income and Poverty in Appalachia: A Report to the Appalachian Regional Commission|
|9510||Scott Loveridge||Local Industrial Recruitment: Boondoggle or Boon?|
|9509||Stratford Douglas||Estimating Relative Standard of Living Among the United States Using Cross-Migration Data reprinted in the Journal of Regional Science 37: 411-436, 1997]|
|9508||Dwight Billings and Ronald L. Lewis||Appalachian Culture and Economic Development [reprinted in the Journal of Appalachian Studies 3,1: 43-69, 1997]|
|9507||Stephan Weiler||The Effects of Industrial Restructuring on Regional Labor Markets: An International Comparison|
|9506||Cynthia Rogers and Brian Cushing||The Appalachian Labor Force: A Report to the Appalachian Regional Commission|
|9505||Andrew M. Isserman||Appalachia Then and Now: An Update of “The Realities of Deprivation” Reported to the President in 1964 [reprinted in the Journal of Appalachian Studies 3,1: 43-69, 1997]|
|9504||Emily Talen||Do Plans Get Implemented? A Review of Evaluation in Planning [reprinted in the Journal of Planning Literature 10,3: 248-259, 1996]|
|9503||Luc Anselin, Anil K. Bera, Raymond Florax, and Mann J. Yoon||Simple Diagnostic Tests for Spatial Dependence [reprinted in Regional Science and Urban Economics 26,1: 77-104, 1996]|
|9502||Brent Yarnal and The Bourgas Project||The Effect of Bulgaria’s Economic and Political Restructuring on Environmental Quality [replaced by book entitled, Bulgaria in Transition, eds., Krassimira Paskaleva, Philip Shapira, John Pickles, and Boian Koulov. Ashgate Publishing Company, 1998|
|9501||W. C. Labys, D. Badillo, and J. B. Lesourd||The Cyclical Behavior of Individual Commodity Price Series [reprinted in Resources Policy, 24,3:147-155, 1998]|
A Report on the Products of the Research
Resulting from the MacArthur Foundation
Program on Peace and International
Research Paper 9415
Abstract: This report contains details of all products of the MacArthur Foundation funded project on liThe Effects of Economic and Political Restructuring in Bulgaria on Environmental Quality: A Case Study of the Impact in the Bourgas Region. II The report includes details of books, chapters in books, published papers, technical and research reports, conference presentations, conference sessions organized, related products of the research project, and details of the personnel associated with the research project.
Small Sample Properties of Tests for Spatial Dependence in Regression Models: Some Further Results
Luc Anselin and Raymond Florax
Research Paper 9414
View Paper (pp. 54, 2136 KB)
Abstract: This paper extends earlier work on the properties of tests for spatial dependence in regression models by means of a series of Monte Carlo experiments for both irregular and regular spatial configurations. Eight tests are considered that are all based on the results of an ordinary least squares regression: Moran’s I; four Lagrange Multiplier (LM) tests (for spatial error dependence; spatial lag dependence; second order spatial error dependence; and for a first order spatial autoregressive moving average or SARMA process); two robust forms of the Lagrange Multiplier test; and a recently suggested robust test. The empirical size of the tests is assessed and their power is compared against three one-directional alternatives (spatial AR error dependence; spatial MA error dependence; and spatial AR lag) and three two-directional alternatives (second order spatial AR errors; second order spatial MA errors; and a SARMA process). The results of the simulations confirm the power of Moran’s I as a misspecification test against various forms of spatial dependence and provide additional evidence on the power of LM tests against spatial lag alternatives. The use of LM tests, in combination with their robust variants is recommended as the most informative diagnostic to guide a spatial model specification search.
Attitudes about Governance and Environmental
Issues in Burgas and Kameno Obshtini, July 1993
John Pickles and Caedmon Staddon
Research Paper 9413
Abstract: This research paper presents summary results and findings of a 1993 survey of citizen attitudes towards changing patterns of governance and environmental regulation in the obstini (counties) of Bourgas and Kameno. The paper deals specifically with perceptions of environmental quality, judgments about the relative importance of economic development and environmental quality, perceptions of the effectiveness of and level of citizen access to government offices and regulatory agencies, and assessments of the general well-being of residents in the region during the period 1989-1993.
The Work Effort and the Consumption
of Immigrants as a Function of their
Peter V. Schaeffer
Research Paper 9412
Abstract: When immigrants’ economic performance has been superior to that of natives, the difference has often been attributed to traits distinguishing them from natives. Recent contributions to the theory of immigration have added another explanation. They show that even if immigrants and natives are identical, the former may face different incentives. This paper also assumes that natives and immigrants are identical in all of their traits. They are fully integrated in the labor market; employers view immigrants and natives as perfect substitutes. Immigrants, however, bear a cost to come to the destination country, a cost not incurred by natives. These costs are assumed to manifest themselves in tvvo different ways. First there are the monetary costs. These include not only the out-of-pocket costs of moving but also the costs to stay in touch with family and friends vvho stayed behind, and the costs of meeting obligations that may be expected of the migrant. Second, the nonmonetary costs include stress, loss of location specific human capital and, related to that, lack of assimilation. The purpose of this paper is to focus on the incentives created by these costs and how they influence the decision of immigrants relative to those of natives. Particular attention is given to the role of assimilation.
Gender and Schooling in Appalachia:
Historical Lessons for an Era of Economic Restructuring
Sally Ward Maggard
Research Paper 9411
Abstract: This paper argues that past failures in manpower and job training programs in Appalachia, as well as low educational attainment in Central Appalachia are linked to the region’s industrial history and gender relations. To avoid repeating these failures, new federal initiatives in work force training and education must intentionally address particular needs of displaced workers, new entrants in the work force, and communities suffering from economic restructuring.
A General Method for Measuring, Decomposing, and Testing Marginal Changesin Income Distributions
K. Victor Chow, John P. Formby, and Buhong Zheng
Research Paper 9410
View Paper (pp. 26, 2017 KB)
Abstract: A general method for measuring and decomposing marginal changes in income andearnings distributions is presented and applied to the 1990-91 recession. The large sample properties of the marginal decompositions are derived and statistical inference procedures are
developed. The methodology requires panel data and the SIPP eight wave longitudinal file is used to measure and test for changes in both income and earnings distributions. Marginal decompositions of the family income distribution by race and earnings distributions by class of worker are used to illustrate the methodology. The results provide strong evidence of negative and significant marginal decompositions for African-American families and private sector blue collar workers. These two population subgroups lost significantly more or gained significantly less
compared to other families and workers at virtually every point considered in the quantile income and earnings distributions. African-American families and blue collar workers are also shown to have experienced overall absolute income declines. Marginal decompositions for other population subgroups are also presented.
Statistical Tests of Changes in U.S. Poverty, 1975 to 1990
Buhong Sheng, Brian Cushing, and Victor Chow
Research Paper 9409
View Paper (23 pp, 1024 KB)
Abstract: Traditional measures of poverty, such as the Headcount Ratio, are seriously flawed, theoretically. And application of such measures without accounting for statistical variability compounds the potential errors. We apply two traditional and five newly developed distribution-sensitive poverty measures along with methods of statistical inference to examine poverty changes in the U.S. from 1975 to 1990. We also let the poverty line vary over a range rather than apply a single, arbitrary poverty line. The traditional poverty measures and distribution-sensitive measures present different patters in the timing and duration of fluctuations in the poverty level. The numerical comparisons successfully rank order less than half the year-to-year and period changes in poverty. For the distribution-sensitive measures, the statistical procedures successfully rank orders nearly all year-to-year and period comparisons. The combined use of distribution-sensitive measures, multiple poverty lines, and statistical inference yields much more robust conclusions about poverty than do traditional poverty statistics.
The Recovery of Rural Economies from Military Base Closures: Control Group Analysis of Two Decades of Experience
Andrew Isserman and Peter Stenberg
Research Paper 9408
View Paper (pp. 31, KB 1947)
Abstract: The Department of Defense has announced 180 military base closures since 1988. More closures will be announced in 1995. The President’s Economic Adjustment Committee works with communities to help them put the bases into civilian use and recover from the loss of local jobs. It claims that jobs lost on the bases have been replaced by twice as many new jobs and that “local community leaders are the real heroes in this adjustment process.” This paper asks whether that optimistic, self-help message is an appropriate one for rural areas where the military base is a dominant employer and alternative development opportunities may be limited. It answers the question on the basis of case studies of seven major base closures that occurred in nonmetropolitan counties during the early 1970s. The control group method provides estimates of the recovery of the local economies by sector by year in terms of the number of jobs. Four of the affected counties grew rapidly and show no sustained adverse employment effects of the closures. Four other counties essentially stagnated. None showed the drastic negative effects predicted by input-output and export base studies. The main factor in being able to absorb the base closure is the local economic context, not local initiative. The case studies suggest that the nature and potential of the local economy ought to be an important factor in base closure decisions.
The Effects of the New Hungarian Energy Policy
Research Paper 9407
View Paper (pp. 16, 712 KB)
Abstract: This paper focuses on the economic and welfare effects of the new Hungarian energy policy which was developed in order to guide the process of transformation of the energy sector from a centrally planned to a market economy. The impacts of the changing energy policy are illustrated here on the examples of the coal mining industry within the energy sector. The new government’s intention is to reduce the inefficient, formerly heavily subsidized coal mining activity and make the remaining companies function within market conditions. The first democratic government after the fall of communism chose a gradual approach in the reform policy as opposed to a s”shock therapy.” The impacts of the recent gradual policy of transformation are compared with the possible consequences of the alternative faster approach regarding both the demand and supply sides of the Hungarian coal market as well as regarding the changes in the structure of coal production and employment. Changes in the welfare of different groups of the society are also analyzed.
New Technology Adoption in West Virginia: Implications for Manufacturing Modernization Policies
Terance Rephann and Philip Shapira
Research Paper 9406
View Paper (pp. 71, 2511 KB)
Abstract: This paper explores the determinants of new technology adoption using data obtained from a 1993 survey of 299 manufacturing establishments in the state of West Virginia. It examines the use of 20 hardware based and organizational new manufacturing technologies, aggregate technology use, and plans for future technology use. Multivariate regression analyses indicate that larger, export-oriented, branch plants that manufacture products in long production runs and are located in counties with a sizable manufacturing sector adopt more new technologies than other types of plants. The results also suggest that there is a role for further government assistance in encouraging plant modernization. Although participation in a state technology assistance program is not yet associated with higher levels of aggregate new technology use, it may be related to the adoption of specific technologies and receptivity to new technology investment. Results also suggest that the current strategy of targeting smaller and intermediate sized plants with services focused on multiple clustered locations may be the best way to stimulate new technology use among manufacturers.
Racial Discrimination in Urban Mortgage Lending: An Examination of FHA versus Conventional Loans
David J. Sorenson
Research Paper 9405
View Paper (pp. 30, 1133 KB)
Abstract: This study adds to the evidence on discrimination in lending terms, primarily in the use of federal loan insurance, by re-examining previous studies of FHA versus conventional loan extension which use the 1983 Survey of Consumer Finances. Following an attempt to replicate the results of the previous SCF findings, the analysis is extended to include other independent variables suggested by theory and other empirical studies. Further extensions examine the effect of interest rate differentials and potential distinctions among minorities in FHA loan usage. The findings of this study have a number of implications, both for theoretical and empirical work concerning loan terms. The most compelling results concern the interest rate effect. It suggests that FHA loans may not, in fact, be the inferior loans they are characterized to be, especially in this sample. Overall, the models estimated were somewhat disappointing with respect to the unexpected significant results in the wrong direction on several variables, especially those concerning welfare and other unreliable income. Despite these troubling results, the findings of the study do show that a number of relevant characteristics have been omitted from previous studies, and that the racial effect finding is not robust to reasonable extensions. In addition, there is some doubt as to the reliability of some of the data in the SCF
Keeping the “Wild” in Wonderful West Virginia
Steve Hollenhorst and Paul Salstrom
Research Paper 9404
View Paper (pp. 28, 1143 KB)
Abstract: The story of West Virginia has been told and retold, usually in the positive context of the “march of civilization.” Early settlers confronted a vast wilderness and set about taming it. State government has long been a partner in the process, promulgating industrial development and economic expansion through supportive legislation and policy. West Virginians have paid a price for this economic success in the form of environmental degradation. The first victim was the vast West Virginia wilderness. Today, wild nature is viewed as a scarce commodity steeped in historic, cultural, and symbolic value. In response, state officials have made some effort in recent decades to adopt policies to preserve portions of what little remains. Yet there is inevitably a lag time between public sentiment and government action. While change has been slow, the growing popular appreciation of wild nature has forced West Virginia’s policy makers to face conservation philosopher Aldo Leopold’s question, “whether a still ‘higher standard of living’ is worth its cost in things natural, wild, and free.”This analysis is organized around three themes. The first is a discussion of the changes that have occurred in the way West Virginians perceive forested wildlands and their relationship to it. Secondly, the evolution and development of state public land management will be examined. Particular focus will be placed on comparing current public attitudes toward wildlands and natural areas with state land policy and management. Thirdly, a policy action agenda is proposed for bridging the disparities between public sentiment and lagging public land policy and management direction.
The Effects of Large Dams on Small Economies
Mostafa Aleseyed and Terance Rephann
Research Paper 9403
View Paper (pp. 28, 1407 KB)
Abstract: Dam construction has played an important role in regional economic development initiatives such as the Tennessee Valley Authority. However, few ex post empirical studies exist of the effects of such projects on smaller rural areas. This paper employs quasi-experimental control group methods to examine the effects of large dams on county income, population, and industry earnings growth for dams that were constructed in rural counties during the period 1963-1977. This paper shows that new dams, generally have few positive economic effects on the counties in which they are built. However, dams built to provide reservoirs for recreational purposes are capable of stimulating some rural economic growth.
Railroads, Deforestation, and the Transformation of Agriculture in the West Virginia Back Counties, 1880-1920
Ronald L. Lewis
Research Paper 9402
View Paper (pp. 43, 1579 KB)
Abstract: Industrial development transformed the back counties from a subsistence to a market economy spawning towns, commerce, and population growth. The railroads tied the back counties into the national markets, but also brought in goods produced outside the region, including farm products from the Midwest. Local farmers either became marginalized, or were forced to adopt the commercial system. Farmers who made the shift soon found that they could neither compete in the marketplace, nor could they return to the old subsistence system of the past. Consequently, farming went into decline.
Survey of Technology Use in
West Virginia Manufacturing
Terance Rephann and Philip Shapira
Research Paper #9401
View Paper (pp. 73, 3166 KB)
A Numerical Technique for the Evaluation of Tax Incidence
Sudha Subrahmanyam and Brian J. Cushing
Research Paper 9302
Abstract: We develop a numerical technique for evaluating the incidence of a change in local taxes. We base the technique on a two-region general equilibrium model of tax incidence. A numerical example, using West Virginia and Pennsylvania as the regions of study, illustrates the nature of tax incidence. Our numerical technique serves as a useful alternative for evaluating the effects of tax policy on the distribution of income between major economic groups for different regions. With only minor modifications, the model and technique are equally applicable to the study of public spending and budget policy.
The Reevaluation of the Differences among Metropolitan, Nonmetropolitan and Central City Poverty
Brian Cushing and Buhong Zhengpp. 28, 1068
Research Paper 9301
View Paper (pp. 29, 1068 KB)
Abstract: It is well known that the metropolitan and nonmetropolitan poor differ in many aspects. However, the difference in poverty intensity has been evaluated by the official poverty measure–the headcount ratio which has several drawbacks. The official poverty statistics also suffer from an arbitrary poverty line. This paper uses newly developed distribution-sensitive measures and 1980 census data to reconsider the differences between metropolitan versus nonmetropolitan, central city versus nonmetropolitan. Instead of using a single, arguable poverty line, this paper lets the poverty line vary over an income range so that the conclusions are more robust. We also divide the U.S. into four regions and examine the poverty rankings within and cross these regions. The headcount ratio and new measures give different results.