Social and Behavioral Sciences Commons^™

Commodities Are Not Industries! A Value Chain Example, Randall W. Jackson, Patricio Aroca

Regional Research Institute Working Papers

Leontief and Stone both received Nobel Prizes in Economics for development and extension of input-output (IO) analysis, a framework that has gained little traction in mainstream U.S. economics. Although IO modeling has gained renewed focus in several problem domains, many contemporary economists eschew Stone's enhancements, resulting in inconsistent analytics, even in top economics journals. In this paper, we use an increasingly common approach to value chain analysis as one example that demonstrates such conceptual misunderstandings and by presenting properly formulated alternatives, we demonstrate the extent of the consequences of neglecting the Stone enhancements and important role of reproducing results.

Extending The Macroeconomic Impacts Forecasting Capabilities Of The National Energy Modeling System, Christa D. Court, Randall W. Jackson, Justin Adder, Gavin Pickenpaugh, Charles Zelek, Amanda J. Harker Steele

Regional Research Institute Working Papers

To comprehensively model the macroeconomic impacts that result from changes in long-term energy-economy forecasts, the United States Department of Energy’s National Energy Technology Laboratory (NETL) partnered with West Virginia University’s (WVU) Regional Research Institute to develop the NETL/WVU econometric input-output (ECIO) model. The NETL/WVU ECIO model is an impacts forecasting model that functions as an extension of the U.S. energy-economic models available from the United States (U.S.) Energy Information Administration’s National Energy Modeling System (NEMS) and the U.S. Environmental Protection Agency’s Market Allocation (MARKAL) model. The ECIO model integrates a macroeconomic econometric forecasting model and an input-output accounting framework along …

Consistent Regional Commodity-By-Industry Input-Output Accounts, Randall Jackson, Péter Járosi

Regional Research Institute Working Papers

A long-standing regional science problem domain focuses on the identification of structural economic change. One of several approaches relies on the use of historical final demand series and a comparison of observed industry output to an estimate of what output would have been were economic structure static. However, these methods were first developed before the introduction of today’s commonly used commodity-by-industry (CxI)input-output (IO) accounting frameworks, and before the application of these methods to regional economies. Correctly formulating the supporting accounting structures for these analyses is essential, but can be challenging even for experienced an- alysts. Related textbook and journal articles …

Enhancing Our Understanding Of A Regional Economy: The Complementarity Of Cge And Eio Models, Andrew Crawley, Geoffrey J.D. Hewings

Regional Research Institute Working Papers

Economic impact models are powerful tools for the assessment of policy changes in regional economies. Computable General Equilibrium (CGE) models have grown in popularity, becoming the dominant choice of practitioners and academics in this field. This popularity has been at the expense of an older class of model, the Econometric Input Output (EIO). The present paper demonstrates how both models, using the same input data, may yield different outcomes. However, the paper suggests that EIO has been underutilized even though it provides a strong complementary tool accompany that enhance analyses using a CGE approach. This paper urges regional economists to …

Solar Bait: How U.S. States Attract Solar Investments From Large Corporations, Jed J. Cohen, Levan Elbakidze, Randall Jackson

Regional Research Institute Working Papers

Past solar adoption literature has focused primarily on households without significant attention to the potential of commercial properties as sites for solar generation. We examine firms’ decisions to install solar panels on their properties using state and firm level data from the U.S. We are interested in the effects of state level characteristics, including policies and regulations, on firm decisions regarding solar investments. We find that state characteristics that influence the return-on-investment from solar installations, most notably solar intensity, are important for commercial adoption decisions. Further, the results suggest that certain state level policies, including solar carve-outs in renewable portfolio …

Drinking Water Quality Impacts On Health Care Expenditures In The United States, Fahad Alzahrani, Alan R. Collins, Elham Erfanian

Regional Research Institute Working Papers

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 …

Air Quality And Asthma Hospitalization: Evidence Of Pm2.5 Concentrations In Pennsylvania Counties, Elham Erfanian, Alan R. Collins

Regional Research Institute Working Papers

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 …

A Role For Regional Science In Analyzing Water Issues, Christa D. Court, Elham Erfanian

Regional Research Institute Working Papers

The World Economic Forum has consistently ranked water crises as one of the top five most impactful issues facing humanity, alongside but not completely separate from issues such as climate change and natural disasters (World Economic Forum, 2019). A growing population and changing climate will only further stress the constrained water system. Acute and ongoing societal disruptions, caused by significant declines in the available quality and quantity of fresh water around the globe, underscore the importance of water to human life and a functional society. The papers in this special issue highlight the role that regional scientists can and should …

Implicit Regional Economic Goals And Objectives: A Study Of U.S. Development Programs, Peter V. Schaeffer, Randall Jackson, Eric Bowen

Regional Research Institute Working Papers

At the present time, U.S. regional economic development policies tend to be focused on sectors, infrastructure, human capital, innovation capability, or to be problem oriented, and only a few programs can be described as being place-based. In this paper, we are looking at major federal regional development programs to deduce their combined implicit place-based goals and objectives. Because the U.S. seems to be relatively unique among OECD countries in its scant use of place-based policies, we compare the United States to, in particular, Canada to gain further insights into the reasons for and potential effects of such policy differences.

Economic Diversity And Regional Economic Performance: A Methodological Concern From Model Uncertainty, Jing Chen

Regional Research Institute Working Papers

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 diversityperformance relationship. To overcome these limitations, a Bayesian Model Averaging (BMA) method is used to address model uncertainty …

Environmental Costs Of European Union Membership: A Structural Decomposition Analysis, Inácio Araúgo, Randall Jackson, Amir Borges Ferreira Neto, Fernando Perobelli

Regional Research Institute Working Papers

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 …

Interpreting Economic Diversity As The Presence Of Multiple Specializations, Jing Chen

Regional Research Institute Working Papers

Conventional wisdom indicates that economic specialization can promote economic growth, whereas economic stability is theoretically associated with diversified economies. This conflicting relationship between specialization and diversity has been questioned, as regional scientists have suggested that specialization and diversity can coexist in a regional economy and proposed the concept of diversified specializations. To test this proposition empirically, three Herfindahl Hirschman Indices measuring regional economic diversity were used to examine the relationship between economic structure and regional economic performance among 359 metropolitan statistical areas (MSA) in the contiguous U.S. The first index measures economic diversity across 87 three-digit North American Industry Classification …

The Impact Of Naloxone Access Laws On Opioid Overdose Deaths In The U.S., Elham Erfanian, Alan R. Collins, Daniel Grossman

Regional Research Institute Working Papers

Opioid overdose is the leading cause of unintentional death in the U.S. Narcan TM (Naloxone) is a prescription medicine that can reverse overdose effects. This research investigates the effect of Naloxone access laws on overdose death rates using state and temporal variation in the enactment of these laws. We also explore possible spillover effects between Naloxone access laws and overdose death rates across states. Our analyses reveal that when broken down by access law provisions, there exists a mixture of positive and negative effects on overdose death rates depending upon the provision. The results indicate that Naloxone access provisions have …

Value Chains: Production Upstreamness And Downstreamness Revisited, Patricio Aroca, Randall Jackson

Regional Research Institute Working Papers

Measures devised to quantify value chain position have been used increasingly in recent years. While the constructs underlying these measures are meaningful, this paper identifies an overlooked implementation problem. Proposed algorithms have been applied as though the underlying data represent flows. Implementation data are drawn from modern input-output accounting frameworks that recognize secondary production explicitly. Unadjusted Use matrices are not conventional flows matrices because they do not identify the industries from which commodities originate. We demonstrate logical inconsistencies that arise, provide correct flow matrix formulations for upstreamness and downstreamness measures, and present empirical comparisons of correct and incorrect formulations.

Geographical Scale, Industrial Diversity And Regional Economic Stability, Jing Chen

Regional Research Institute Working Papers

The empirical relationship between economic diversity and economic stability varies when it is measured at dfferent geographical scales. This paper evaluates the role of geographical scales in assessing this diversity-stability relationship among counties, states, Economic Areas (EAs), metropolitan counties and metropolitan statistical areas (MSAs) in the contiguous U.S. When choosing geographical units to analyze regional economic structure, it is necessary that the geographical units be large enough in population and employment to quantify effectively the regional economic structure. In addition, this paper proposes that geographical units also should be functionally aggregated regions as they better represent spatial interactions than formal …

The Effect Of Health Care Entrepreneurship On Local Health: The Case Of Medexpress In Appalachia, Amir Borges Ferreira Neto, Joshua C. Hall

Regional Research Institute Working Papers

We test the hypothesis that the opening of an Urgent Care Center (UCC) has positive impacts on the local community. There are several mechanisms through which a UCC can have an impact: lower health care costs, emergency room decongestion, and improved access to medical information. We examine the entry of MedExpress into Appalachian counties between 2001 and 2013. Employing data from Health Resources Files, which provides information for all counties for specific years, we use Propensity Score Matching to create a year 2000 control group for the counties “treated” by MedExpress entry beginning in 2001. We then employ a standard …

Charges For Water And Access: What Explains The Differences In West Virginia Municipalities?, Elham Erfanian, Alan R. Collins

Regional Research Institute Working Papers

Applying linear and log-log functional forms plus spatial econometric analyses to a dataset of 125 municipal water utilities, we investigate the determinants of charges for water use and minimum monthly access to water across West Virginia municipalities in 2014. Water charges models are consistent with the theory of water cost determination as water source, debt, and economies of size plus scale influence what household consumers pay for water. Based on model results, groundwater use by utilities lowers water charges and is estimated to save household customers in West Virginia over $3.6 million annually. West Virginia households typically pay far below …

Woody Biomass Processing And Rural Regional Development, Randall Jackson, Péter Járosi, Amir Borges Ferreira Neto, Elham Erfanian

Regional Research Institute Working Papers

This paper reports on economic and environmental impacts of introducing woody biomass processing in an economically distressed area in central Appalachia, one of the more heavily forested areas in the U.S. Woody biomass is a readily available unconventional energy source that has the potential to boost the rural region’s economy. We use a static regional computable general equilibrium model to assess regional economic impacts of two different WBP production pathways, biomass to ethanol and biomass to biofuel via fast pyrolysis. In an economy with a workforce approaching 160,000, we find that introducing woody biomass ethanol or fast pyrolysis processing would …

What Is Near And Recent In Crime For A Homeowner? The Cases Of Denver And Seattle, Adam Nowak, Juan Tomas Sayago Gomez

Regional Research Institute Working Papers

This paper analyzes the effects of the concentration of crime on housing prices using nonparametric methods. Specifically, we use a modified local K-function in order to measure crime concentration. This technique provides us with a crime measure that is not dependent on pre-defined boundaries. Results from this analysis suggest a decrease in housing prices of two percent to seven percent for crimes in the past six months that occur within a quarter of a mile of the house.

Impact Evaluation Of Investments In The Appalachian Region: A Reappraisal, Juan Tomas Sayago Gomez, Gianfranco Piras, Donald J. Lacombe, Randall Jackson

Regional Research Institute Working Papers

We evaluate the impact of the Appalachian Regional Commission’s investments on its members counties over almost fifty years. We apply different propensity score methods to find the most appropriate matching and to identify the effect of policy implementation in the most accurate way possible.

The general evidence is that counties that received ARC funding had higher per-capita income growth compared to the control counties. Per-capita income growth rate in ARC counties grew an average of 5.5 percent over the entire study time period compared to the control counties. Employment grew significantly faster in ARC counties compared to the control counties …

Looking Behind The Scenes: An Assessment Of The Interdependence Of Brazilian Cultural Industries, Amir Borges Ferreira Neto, Fernando Perobelli, Alexandre Rabelo

Regional Research Institute Working Papers

How important is Brazil’s cultural industries to its economy? We provide an answer to this question by evaluating the interdependence of the cultural activities in the Brazilian production structure and its evolution over the last few years (2005 – 2009). To accomplish this, we disaggregate 13 cultural economic industries in the Brazilian input-output table and calculate several indexes, such as, the production multiplier, linkage indexes, fields of influence and extraction analysis. Results show that the only cultural sector with high links to other sectors in the production structure is Telecommunication, edition and news agencies and that this sector provides the …

Cost-Effectiveness As Energy Policy Mechanisms: The Paradox Of Technology-Neutral And Technology-Specific Policies In The Short And Long Term, Paulo Henrique De Mello Sant'ana

Regional Research Institute Working Papers

When choosing policy mechanisms to design and deploy energy policies, policymakers typically seek cost-effective ones, linking cost effectiveness to the lowest cost of support for RES-E generation and/or consumer costs. The objectives of this paper are to analyze the cost-effectiveness of renewable portfolio standards (RPS), feed-in tariffs (FIT) and auctions in the short and long term, considering both technology-neutral and technology-specific approaches. Results show that RPS and auctions are more cost-effective than feed-in tariffs (FIT) in the short term if cost-effectiveness is defined as minimizing consumer costs. Also, if one or more emerging technologies with higher levelized life cycle costs …

A Framework For Measuring County Economic Resilience, Mulugeta Kahsai, Junbo Yu, Mark Middleton, Peter V. Schaeffer, Randall Jackson

Regional Research Institute Working Papers

The study provides a framework to develop economic resilience index for West Virginia counties based on the premise that county economic resilience depends on its physical and human resources, structure and diversity of its economic base (employment and income diversity), entrepreneurial activity and business dynamics and scale and proximity (spatial issues). Using 17 indicators along four of the six proposed dimensions, a preliminary economic resilience index has been created for West Virginia counties for the years 2000 and 2005. Geospatial maps are also developed to explore the evolution of the geographical patterns of economic resilience across time. The effectiveness of …

Toward Consistent Cross-Hauling Estimation For Input-Output Regionalization, Christa D. Court, Randall Jackson

Regional Research Institute Working Papers

Although the literature has provided steps in the right direction, conceptual shortcomings still exist in the cross-hauling adjustment methods that are currently being applied in the literature. This paper represents an attempt to 1) characterize the cross-hauling adjustment methods that exist in the literature; 2) identify the shortcomings that exist with the most widely applied method, CHARM; 3) provide an empirical analysis to tackle the notion of just how ubiquitous crosshauling is and the potential impact it has on input-output multiplier estimates; and 4) suggest directions for future conceptual and theoretical development that will lead to consistent cross-hauling measures for …

Fellows Address: Are Industry Clusters And Diversity Strange Bedfellows?, Randall Jackson

Regional Research Institute Working Papers

In this address, I review industry clustering and diversification strategies to compare and contrast their underlying foundations. The lack of consensus choice of one or the other for regional economic development strategies along with the recognition that in the dynamic process of development these two processes are related leads me to conclude that clusters and diversity need not be such strange bedfellows after all, and that a rational approach to economic development can leverage the strengths of each and offset weaknesses. I follow this discussion by introducing a cluster assessment diversification strategy (CADS) apparatus that can be used to measure …

Cross-Hauling In Input-Output Tables: Comments On Charm, Randall Jackson

Regional Research Institute Working Papers

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.

Cross-Hauling And Regional Input-Output Tables: The Case Of The Province Of Hubei, China, Yongming Huang, Anthony T. Flegg, Timo Tohmo

Regional Research Institute Working Papers

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.

An Integrated Environmental And Economic Modeling Framework For Technological Transitions, Randall Jackson

Regional Research Institute Working Papers

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 …

On The Finite Sample Properties Of Pre-Test Estimators Of Spatial Models, Gianfranco Piras, Ingmar R. Prucha

Regional Research Institute Working Papers

This paper explores the properties of pre-test 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 …

The State Of Play In Poland”S Unconventional Shale And Oil Development, J Wesley Burnett, Randall Jackson, Robert Blobaum

Regional Research Institute Working Papers

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 …