An August 2019 study in the journal Nature Sustainability, illustrates how ineffective conservation measures may be when they can only be implemented in the wrong months or downstream of where the shortage is occurring, according to the study’s lead author, William Jaeger, a professor in Applied Economics at Oregon State University. The findings can be applied to other river basins and help policymakers make decisions about mitigating drought, Jaeger said.  “The results indicate that while the policies are effective at conserving water, they have limited ability to mitigate the shortages because timing and location of conservation responses do not match the timing and location of the shortages,” he said. “It’s a case of a mismatch in terms of where and when.”The study, funded by the National Science Foundation and National Oceanic and Atmospheric Administration, was based on results derived from a computer model called Willamette Envision, which represents the fine-level interactions between the Willamette River Basin’s natural water supply and the human and natural system’s water demands for farms, people, fish, and forests.

Professor JunJie Wu, along with two other authors, published in July 2019 "Energy price shocks, household location patterns and housing crises: Theory and implications" in the journal Energy Economics.⁠  The U.S. housing collapse in 2007 is widely blamed for inducing a financial crisis that spread to the real economy and caused a severe and prolonged downturn. This paper develops a model to investigate the role of gasoline price shocks in triggering the housing market collapse and identifies a new channel through which energy price shocks affect the financial market and the macro economy. Results suggest that unanticipated gasoline price shocks increase the cost of work commutes, lower the value of homes away from the city center, and increase foreclosure rates as homeowners either cannot afford mortgage payments amid elevated gas expenditures or seek to abandon underwater homes. The model predicts that gasoline price shocks disproportionately affect suburban households that face greater exposure due to longer commutes and lower incomes. ⁠This research also has implications for the political economy of climate change policy. Irrespective of energy market dynamics, policies to mitigate climate change, like gasoline or carbon taxes and renewable fuel standards, raise transportation costs that are borne disproportionately by suburban homeowners. ⠀

Professor Dave Lewis, along with colleagues from Penn State and Wisconsin, published "The Spatial Dynamics of the Economic Impacts of an Aquatic Invasive Species: An Empirical Analysis" in the February 2019 issue of Land Economics. This paper examines how the economic loss from an aquatic species invasion of a freshwater lake is allocated between users of the lake itself (own-lake effect), and users of neighboring lakes that become invaded because the lake is a new source of the invader (spillover effect). The empirical application concerns the Eurasian watermilfoil invasion in the lake-rich landscape of northern Wisconsin. Results suggest that coordinated management across lakes provides its highest economic value in the early years of an invasion, before high-value, high-traffic lakes are invaded, and drops quickly once the invasion claims these lakes.

Associate Professor Christian Langpap, along with Laura Grant from Claremont McKenna College, published "Private Provision of Public Goods by Environmental Groups" in October 2018 in the Proceedings of the National Academy of Sciences (PNAS). Professors Langpap and Grant noted that many environmental nonprofit groups are assumed to provide public goods. However, while an extensive literature examines why donors join and give to nonprofits, none directly tests whether donations actually provide public goods. They examined this question by studying donations to watershed groups and found that their increased presence resulted in lower dissolved oxygen deficiency and higher proportions of swimmable and fishable water bodies. In addition, increased donations to and expenditures by the groups also improved water quality showing that private groups likely played a role in mitigating environmental problems. Overall, the results indicate private provision of a public good by nonprofit organizations.

Professor JunJie Wu, along with two colleagues from China, in May 2018 published "Spatial distribution of nature reserves in China: Driving forces in the past and conservation challenges in the future" in the journal Land Use Policy. The article notes that nature reserves are hubs of biodiversity conservation in China, but their spatial distributions are not in line with the priority set based on biological criteria. This supposition raises some fundamental questions: What caused this discrepancy? How was the spatial distribution of nature reserves determined in China? This paper aims to address these questions using a unique nation-wide county-level database. The results reveal that although ecological factors play a significant role in nature reserve designations, economic considerations appear to be more significant in explaining the spatial distribution of local nature reserves in China. The opportunity cost of land conservation affects both the probability of designation and the amount of land designated for nature reserves in a county, and the effects vary by region, type of nature reserves, and time period of designation. Implications of these results for new nature reserve designations and for sustainable conservation of the existing protected areas are discussed.

OSU Applied Economics faculty members Laurie HoustonSusan Capalbo, and Clark Seavert, along with their OSU colleagues Meghan Dalton, David Bryla, and Ramesh Sagili, published "Specialty fruit production in the Pacific Northwest: adaptation strategies for a changing climate" in April 2018 in the journal Climatic Change. The authors studied the impact of climate change on specialty fruit crops, which represents a substantial portion of the value of agricultural production in the Pacific Northwest. The authors conclude that climate change may threaten water sources, lengthen the dry season, raise temperatures during both the winter chilling period and the growing season, and facilitate the spread of fungal diseases and insects. Such changes have the potential to substantially reduce net returns due to increased input costs and altered yields and product quality. Many management strategies that are already being used to prolong growing seasons in marginal production areas and to improve production and quality in established production regions may also be useful as adaptation strategies under a changing climate. These strategies mostly involve moderating temperatures and controlling or compensating for mismatches between phenology and seasonal weather conditions.

Associate Professor Christian Langpap, along with a colleague from the University of Illinois, published "The Economics of Species Conservation" in April 2018 in the Annual Review of Resource Economics. In this paper, the authors review research in economics on how best to counter the global threat to species extinction (now affecting 1 in 4 species). Normative research has developed useful tools for cost-effectively choosing areas of habitat to protect, and such work has also designed working-lands contracts that can induce efficient quantities and patterns of conservation on private lands. Positive research finds evidence that payments for ecosystem service programs are effective, but legal protections for threatened species have a mixed record of success. Economists have also measured both the nonmarket benefits and the costs of species conservation. Emerging work is tackling the particular challenges to species conservation posed by climate change, the demand for exploiting charismatic megafauna, and global population growth.

 

Professor John Antle recently published "Methods to Assess Between-system Adaptations to Climate Change: Dryland Wheat Systems in the Pacific Northwest United States" in the February 2018 issue of the journal Agriculture, Ecosystems & EnvironmentIn this paper, the authors propose to extend methods for agricultural impact assessment to study the adaptations that agricultural producers are likely to consider in response to climate change such as the use of different combinations of crop or livestock species and associated changes in management. They conclude that the method used for estimating the productivity of the new system introduces an element of uncertainty into adaptation analysis, in addition to the other data, model and scenario uncertainties.

Assistant Professor Steven Dundas, with co-authors from North Carolina State University and RTI International, recently published a study that provides evidence on the relative economic value of efforts to balance environmental protection with recreation access to public lands. Using recreational data for Cape Hatteras National Seashore, the research shows that the costs to recreational fishing from temporally and spatially varying closures to both vehicle and pedestrian access to portions of the seashore range from $400,000 to $2 million annually. These costs are shown to be substantively lower than potential benefits of protecting nesting shorebirds (piping plovers) and sea turtles. The paper, Recreation Costs of Endangered Species Protection: Evidence from Cape Hatteras National Seashore, is in the January 2018 issue of Marine Resource Economics.  A recent news story about this paper can be found here.

 

Professor Jennifer Alix-Garcia, together with co-authors from the University of New South Wales in Australia and the World Bank, investigates the impact of refugee camps on local populations.  The work uses both nighttime lights data -- a proxy for economic activity -- and household surveys to assess whether or not Kakuma refugee camp in northern Kenya has helped or hurt the local pastoral population.  The research shows that, on average, local residents benefit from the camp. In fact, a 10% increase in the refugee population is associated with approximately a 5.5% increase in consumption of locals living near the camp.  This effects seem to be driven by increases in wage earning opportunities and the possibility of selling agricultural and livestock production to camp residents.  The work is in the January 2018 issue of the Journal of Development Economics.  Prof. Alix-Garcia recently appeared on the Voice of America radio program South Sudan in Focus to discuss this research (available here, starting at minute 12:25).

 

Professor Larry Lev and Senior Faculty Research Assistant Laurie Houston were part of a group that published a journal article in January 2018 entitled  "Beyond Fresh and Direct: Exploring the Specialty Food Industry as a Market Outlet for Small- and Medium-sized Farms" in Renewable Agriculture and Food SystemsThis study investigated the benefits, barriers, and challenges for small- and medium-sized farmers who want to sell products to specialty food manufacturers (SFMs). Their paper analyzed 240 survey responses from dairy, meat, fruit/vegetable/nuts, and grain specialty manufacturers and 60 in-depth interviews of these manufacturers and farmers in California, Minnesota, Wisconsin, Washington, and Oregon. Overall, they found evidence that the specialty food industry is an emerging market channel for small- and medium-sized farms. They also found that to be successful suppliers of SFMs, farmers need to have processes in place to ensure the quality of their products.