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Working papers

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.

Papers are stored in the WVU Research Repository under collections, Regional Research Institute.


Drinking Water Quality Impacts on Health Care Expenditures in the United States

Fahad Alzahrani, Alan R. Collins, and Elham Erfanian, Resource Economics and Management, West Virginia University

Keywords: Water Quality, Health Care Expenditures, Spatial Econometrics, Spillover Effects
JEL Classification: Q53, I11, C31

Working Paper 2019-02

Abstract: This paper explores the relationship between episodes of contaminated drinking water and health care expenditures in the United States. The analysis relies on panel data from the 48 contiguous states from 2000 to 2011. We use the population served by public water systems that violate health-based standards of the Safe Drinking Water Act as a proxy for contaminated drinking water. We estimate spatial and non-spatial models and control for factors that may affect per capita health care expenditures including variables that reflect air quality violations along with ability to pay plus demand for and supply of health care services. The results from a Spatial Durbin Model indicate that a 1% decrease in the percentage of population exposed to drinking water quality violations is associated with reductions in in-state and regional effects equal to 0.005% ($0.32) and 0.035% ($2.26) of per capita health care expenditures, respectively. Drinking water violations have a larger impact on expenditures than air quality violations (whose effects are not statistically different from zero). However, compared to other factors, such as Medicare enrollment and income, the impact of these violations on health care expenditures is relatively small. We find that regional health care expenditure impacts from drinking water violations are substantially greater than in-state impacts. Thus, a regional approach is recommended to addressing drinking water quality improvements.

Air Quality and Asthma Hospitalization: Evidence of PM2.5 Concentrations in Pennsylvania Counties

Elham Erfanian and Alan R. Collins Resource Economics and Management, West Virginia University

Key Words/Codes: PM2.5 concenterations, Asthma, Spatial econometrics, Wind pattern weight matrix,
Spillover effects
JEL Classification: Q53, I18, Q40

Working Paper 2019-01

Abstract: According to the World Health Organization, 235 million people around the world currently suffer from asthma, which includes approximately 25 million in the United States. There is substantial epidemiological evidence indicating linkages between outdoor air pollution and asthma symptoms, more specifically between concentrations of particulate matter and asthma. Using county level data for 2001-2014, a spatial panel framework is imposed based upon prevailing wind patterns to investigate the direct and indirect impacts of PM2.5 concentration levels on asthma hospitalization in Pennsylvania. This model controls for population density, precipitation, smoking rate, and population demographic variables. Results show that PM2.5 concentrations as measured at the county level have positive direct and indirect effects on asthma hospitalization. A one-unit increase in PM2.5 in one Pennsylvania county will add, on average $1.29M ($754,656 direct and $539,040 indirect) to total annual asthma hospitalization costs with the state of Pennsylvania. This study highlights the need for realistic and accurate impact analyses of ambient air pollution on asthma that reflects the impacts on neighboring regions as well. In order to capture the spillover effects of health-related impacts from PM2.5 pollution, a wind direction algorithm to identify appropriate neighbors is important .


Economic Diversity and Regional Economic Performance: A Methodological Concern from Model Uncertainty

Jing Chen, Graduate Research Assistant, Regional Research Institute and Department of Geology and
Geography, West Virginia University

Key Words: Specialization, Diversity, Economic Structure, Regional Economic Development, Model Uncertainty

Working Paper 2018-05

Abstract: Although the role of spatial dependence has been considered in studying the relationship between economic diversity and regional economic performance, the existing literature seldom mentions model uncertainty, which mainly arises from at least two sources. One source of model uncertainty is the choice of an appropriate spatial weight matrix that describes the spatial interactions between two regions, which can be specified in a variety of ways. The second source of model uncertainty is choosing a set of control variables to model the diversity-performance relationship. To overcome these limitations, a Bayesian Model Averaging (BMA) method is used to address model uncertainty when studying the effects of economic diversity on short-term employment growth and long-term economic stability among 359 Metropolitan Statistical Areas (MSA) in the contiguous U.S. The potential spatial spillovers are also considered through spatial regression models. This empirical analysis suggests that ignoring model uncertainty can impact the estimates and our understanding of economic diversity, and it also confirms that economic diversity of neighbors plays an important role in regional economic development.

Environmental Costs of European Union Membership: A Structural Decomposition Analysis

Inácio Araúgo, Universidade Federal de Juiz de Fora; Randall Jackson, West Virginia University; Amir Borges Ferreira Neto, West Virginia University; Fernando Perobelli, Universidade Federal de Juiz de Fora

Working Paper 2018-04

Abstract: The interest in this paper lies in the environmental costs of the European Union (EU). EU membership requires a series of economic and political changes that should impact the country’s production and consumption structures and its trade relationships. These, in turn, will affect CO2 emissions sources and levels. This is especially true for the former Soviet Union countries that recently joined the EU, given the difference in their levels of development and production structure. Using a structural decomposition analysis we are able to quantify the main drivers of changes in emissions differentiating six components, namely: emissions intensity, industrial structure and sourcing, consumer preferences, final demand sourcing and consumption level. Grouping the countries into five clubs, New European Union countries, Old European Union countries, the United States of America, China, and the Rest of the World, we measure trading pattern changes and their impact on CO2 emission levels.