Environmental Economics

Five year anniversary: Halloween 2011 from PhD Comics

PhD Comics: Halloween 2011

Source: http://www.phdcomics.com/comics.php?f=1448

via www.env-econ.net

Source: http://www.phdcomics.com/comics.php?f=1448

And now it is time to don my "MAKE AMERICA GREAT AGAIN" ballcap and hit the streets!

Obligatory Halloween economics post:

U.S. consumers don't have to dress up for Halloween—they're already superheroes of the 2016 economy.

A number of economic factors are helping the consumer this year, and a new report from IHS Global Insights highlights how the amount expected to be spent on Halloween candy is a perfect symbol of that strength.

"Overall, real consumer spending has been relatively strong since last Halloween due to modest consumer price inflation, low gasoline prices, better employment opportunities, and improved household finances," Chris Christopher, IHS Global Insights' director of consumer economics points out. 

The team expects spending on Halloween candy to experience the strongest increase since 2011, rising 5.5 percent and hitting $3.8 billion. In 2014 and 2015, spending on Halloween candy was up 5 percent and 1.7 percent, respectively. The report defined spending on Halloween candy as estimated October personal consumption expenditures, seasonally adjusted, on candy and chewing gum.

The additional spending isn't due to an increase in the prices of Halloween candy, either, as those are expected to decline for the first time since 2013.

via www.bloomberg.com

Actually, I can't decide between my MAGA or Crooked Hillary ballcap. 

 

"dozens of economists around the state" who endorse the I-732 carbon tax

I added my name to the list (alas, I'm an Appalachian State economist, not Washington state):

I-732 is endorsed by a bipartisan group of citizens, business leaders, scientists, economists, public officials, and social and environmental leaders. Click here to add your name to our growing list of supporters. ...

Endorsements from Economists

Affiliations listed for identification purposes only. Individuals listed are speaking only for themselves and not for their affiliated agency.

• Professor Gardner Brown, University of Washington Economics Department
• Professor Haideh Salehi-Esfahani, University of Washington Economics Department
• Professor Joe Cook, University of Washington Evans School of Public Policy and Governance
• Professor Jan Crouter, Whitman College Economics Department
• Lisa Donegan, Ph. D., Adjunct Faculty Seattle Pacific University’s School of Business, Government, and Economics
• Professor Mark Long, University of Washington Evans School of Public Policy and Governance
• Professor Sergey Rabotyagov, Environmental & Forest Sciences, University of Washington
• Regents Professor C. Richard Shumway, Washington State University School of Economic Sciences
• Professor Sharon Shewmake, Western Washington University Department of Economics
• Professor Phil Thompson, Western Washington University Department of Economics
• Professor Hart Hodges, Western Washington University Center for Economic and Business Research
• Professor Peter Dorman, Evergreen State College Faculty in Political Economy
• Professor Toni Sipic, Central Washington University Department of Economics
• Professor John Beck, Gonzaga School of Business Administration
• Professor Ryan Herzog, Gonzaga School of Business Administration
• Professor Erica Johnson, Gonzaga School of Business Administration
• Professor Annie Voy, Gonzaga School of Business Administration
• Professor Joseph M Phillips, Seattle University, Dean of Albers School of Business and Economics
• Professor Gareth Green, Chair, Department of Economics and Department of Finance, Seattle University Albers School of Business and Economics
• Professor Meenakshi Rishi, Seattle University, Albers School of Business and Economics
• Stacey Jones, PhD, Seattle University Albers School of Business and Economics
• Professor Lea Fortmann, University of Puget Sound Economics Department
• Professor Hendrik Wolff, Simon Fraser University Economics Department
• Yoram Bauman, PhD, founder and co-chair, Carbon Washington / Yes on 732
• William M Swan, PhD, Former chief economist (1995-2006), Boeing Aircraft
• Bruce Flory, PhD, Principal Economist, Seattle Public Utilities
• Denise Hazlett, Whitman College Economics Department
• Peter Kelly, PhD

via yeson732.org

Only 28?

"A Little-Noticed Fact About Trade: It’s No Longer Rising"

Off-topic but important:

The growth of trade among nations is among the most consequential and controversial economic developments of recent decades. Yet despite the noisy debates, which have reached new heights during this presidential campaign, it is a little-noticed fact that trade is no longer rising. The volume of global trade was flat in the first quarter of 2016, then fell by 0.8 percent in the second quarter, according to statisticians in the Netherlands, which happens to keep the best data.

The United States is no exception to the broader trend. The total value of American imports and exports fell by more than $200 billion last year. Through the first nine months of 2016, trade fell by an additional $470 billion.

It is the first time since World War II that trade with other nations has declined during a period of economic growth. ...

The economist Branko Milanovic published a chart in 2012 that is sometimes called the elephant chart, because there is a certain resemblance. It shows real incomes rose significantly for most of the world’s population between 1988 and 2008, but not for most residents of the United States and other developed countries.

The chart is often presented as a depiction of the consequences of globalization. The reality is more complicated, but perception is undeniable. Voters in developed nations increasingly view themselves as the victims of trade with the developing world — and a backlash is brewing.

Donald J. Trump’s presidential campaign is an obvious manifestation, as is Hillary Clinton’s backing off from her support of the Trans-Pacific Partnership trade deal. A study published in April found that voters in congressional districts hit hardest by job losses are more likely to reject moderate candidates, turning instead to candidates who take more extreme positions.

Economic stagnation is turning European voters against trade, too.

Professor [Dani] Rodrik said that proponents of free trade were guilty of overstating the benefits and understating the costs. “Because they failed to provide those distinctions and caveats, now trade gets tarred with all kinds of ills even when it’s not deserved,” he said. “If the demagogues and nativists making nonsensical claims about trade are getting a hearing, it is trade’s cheerleaders that deserve some of the blame.”

via www.nytimes.com

If you see any four year old pirates today, ask them if they are celebrating Iceland's election results

Halloween politics not from The Onion (I don't think):

Iceland’s prime minister announced on Sunday that he would resign, as the insurgent, anti-establishment Pirate Party capitalized on a wave of anger over corruption to come in second place in the country’s general election.

The prime minister, Sigurdur Ingi Johannsson, announced his departure on national television after his center-right Progressive Party’s share of seats in the 63-seat Parliament collapsed to eight from 19 in the previous election, in 2013. ...

The conservative Independence Party, which has been in a governing coalition with the Progressives, came in first with 21 seats, up from 19 in the last election.

But the big winner in the election on Saturday was the four-year-old Pirate Party, which took 10 seats, more than tripling its showing of three seats in the last general election. The Left-Green Party also won 10 seats. The left-leaning parties — the Left-Greens, the Pirates and two allies — won 27 seats over all, just short of a majority.

The liberal Regeneration Party, which is expected to play the role of kingmaker, has ruled out joining a coalition with the current governing establishment parties. This means that left-leaning parties could potentially form a governing coalition.

via www.nytimes.com

This the kind of stuff Iceland's pirates are up to (Wikipedia):

On 4 July 2013, a bill was introduced in parliament that would, if passed, immediately grant Edward Snowden Icelandic citizenship. The proposer of the bill was Helgi Hrafn Gunnarsson (Pirate Party) and it was co-sponsored by the other Pirate Party parliament members ...

People who live in glass houses post title: I'll take Iceland more seriously when their politicians start acting more like grown-ups. 

 

Benefit-cost analysis at the county commissioners meeting

Some outreach of community-based faculty/student research:

[Watauga County] Commissioners heard from High Country Recreation representative Dr. Scott St. Clair and ASU economics professor John Whitehead about the economic benefits of a recreation center. The presentation indicated that a recreation center could generate a $36 million dollar impact on the local economy and there is a 90% chance that the benefits of such a facility would outweigh the costs. 

via www.goblueridge.net

Here is a summary of the report prepared by members of the App State Student Chapter of the National Association for Business Economics: https://business.appstate.edu/news/proposed-recreation-center-infuse-money-economy-create-other-benefits-high-country.

Picture of the day: Richard Tol on the left, Lord Stern on the right

Source: twitter via http://cartoonsbyjosh.co.uk/

Background: http://www.env-econ.net/2016/10/and-i-thought-the-hoax-was-perpetuated-by-the-chinese.html

"Even top economists publish in predatory journals, study finds" #RePEc

Retraction Watch:

Top-ranking economists sometimes publish papers in open access journals deemed potentially “predatory,” according to a new analysis.

The findings contradict previous results that show that researchers who publish papers in “potential, possible, or probable” predatory journals (as defined by librarian Jeffrey Beall) are largely inexperienced.

According to the study, 27 of the most eminent economists (within the top 5% of their field) have published nearly 5% of their papers in predatory journals. These researchers published 31 papers in predatory journals in 2015 alone.

The finding — which is not yet peer reviewed — comes as a “big surprise,” co-author Frederick Wallace of the Gulf University for Science and Technology in West Mishref, Kuwait, told Retraction Watch.

At the end of last year, Wallace and Timothy Perri from the Appalachian State University in Boone, North Carolina noticed that 39 predatory journals were listed on the database Research Papers in Economics (RePEc). After some digging, the pair identified just under 1,300 papers published last year in predatory journals in RePEc, submitted by close to 2,800 authors.

Although only around 5% of the study’s sample authors who’d published in predatory journals (124 individuals) were registered with RePEc, 27 (around one-fifth) are listed among the top 5% of RePEc-registered authors. ...

 

Mark McCabe, an economist at Boston University in Massachusetts and SKEMA Business School in Sophia Antipolis, France, raised some doubts over whether the findings truly represent how often the field’s top researchers are publishing in predatory journals. For instance, the top 5% in RePEc may not represent the true top 5% of the field, he noted:

1.  In what type of non-predatory journals are these (top 5%) authors publishing papers (the difference between predatory and non-predatory can be very small)?  Impact Factors?  Publishers?  etc.  Are any of them among the top 100 journals in economics?

2. What are the institutional affiliations of [these] (top 5%) authors?  Any top-ranked economics departments or business schools?

3.  Where is the list of the predatory journals in which these 148 papers were published?

Jeffrey Beall, a librarian at University of Colorado Denver and the creator of Beall’s lists, noted: 

Actually, a broad range of people submit to predatory journals.

He added that he was also hesitant to draw too strong a conclusion from these findings:

I see this study as preliminary, and I am not sure it contains strong evidence.

Asked about the criteria RePEc uses to rank researchers, Wallace pointed us to this paper, which outlines the process RePEc uses to rate authors registered on the site using factors such as the number of papers, citations received, journal page counts, and views and downloads statistics.

Wallace argued that he believes that a high ranking in RePEC is something the field takes seriously:

I’d blow my own horn if I was listed as a top 5% researcher. I’d include it in my annual report every year.

via retractionwatch.com

I've read the paper (I prefer this link) and the evidence it presents is quite strong. The evidence is an accounting exercise, matching journals from Beall's list to economists on the RePEc list. There is no fancy analysis. If you don't like the evidence then you must think there is something wrong with one of the lists. I know of no other list of predatory journals. The RePEc economist ranking list is objective (here is a paper that critically examines the rankings) and includes everyone who wants to be included (you must be a registered RePEc author to be ranked). So, the questions from Dr. McCabe are easily answered:

1. https://ideas.repec.org/top/top.person.all.html
2. https://ideas.repec.org/top/top.person.all.html
3. http://www.env-econ.net/2016/09/a-new-paper-on-predatory-journals-in-economics-repec.html

For evidence that RePEc rankings are taken seriously, here is Matt Kahn: 

From a worker's perspective, if you earn a good reputation at one firm --- how do you cash in on this fact with firms that don't know you have a good reputation? How do you signal your quality? In the past, an Ivy League degree or a Mensa membership card helped but in this economy --- will workers soon have a vector of crowd sourced metrics that they can display to potential employers? A future labor economist could then run hedonic wage regressions to test how the labor market rewards each of these metrics.

This world already exists in academic economics.  REPEC does a pretty good job of ranking us.  For those at public universities, you can look up our salaries and correlate it with our REPEC rankings. You will see a very high positive correlation.   Academic economics can be modeled pretty well as  a perfectly competitive labor market.  There is an element of crowd sourcing to REPEC rankings as citations and paper downloads are some of the metrics used to create the single index of economist "quality".

And for evidence that "I'd blow my own horn if I was listed as a top 5% researcher", here again is Matt Kahn:

REPEC provides an objective measure of who is "Royalty" in the economics profession.  The current list of the top 5% is here.   I am ranked #681 out of 27,365 economists so that's not bad (and my 3 books aren't counted here).

Quote of the day: "...we're in the sixth mass extinction."

Here's the full quote:

"This is definitely human impact, we're in the sixth mass extinction. There's only been five before this and we're definitely in the sixth," WWF conservation scientist Martin Taylor told CNN."

...and here's more of the story:

More than two thirds of the world's wildlife could be gone by the end of the decade if action isn't taken soon, a new report from the World Wildlife Fund revealed on Thursday.

Since 1970, there has already been a 58% overall decline in the numbers of fish, mammals, birds and reptiles worldwide, according to the WWF's latest bi-annual Living Planet Index.

If accurate, that means wildlife across the globe is vanishing at a rate of 2% a year.

...and here's a link to the full story.

...and here's a picture of a giraffe I took in Tanzania two weeks ago.

...and here's a lion that smiled for the camera:

...and here's a young zebra to add gratuitous emotional impact to the story:

 

 

A revenue neutral carbon tax in ... New Jersey

Jared Walczak at the Tax Foundation:

On November 1st, New Jersey residents will start paying considerably higher gas taxes, with the rate rising from 14.5 to 37.5 cents per gallon (cpg) as part of a broader tax deal negotiated between Governor Chris Christie (R) and Democratic leadership in the state legislature. ... The gas tax hike is paired with a sales tax rate reduction, an increase in the earned income tax credit and the retirement tax exemption, and the phase-out of the estate tax.

Right now, New Jersey has the second-lowest motor fuel tax in the nation (14.5 cpg). Only oil-rich Alaska is lower, at 12.25 cpg. In just over a week, it will have the seventh highest, just a hair under Connecticut’s 37.51 cpg. The rate, however, has the potential to fluctuate over the years, based not on gasoline costs or even inflation indexing, but rather on consumption. The law caps the revenue from the gas tax increase at the amount that 23 cents (or 12.85 percent per gallon) would have produced during the 2016 fiscal year. If consumption rises, the rate will decline slightly. If consumption falls, it will rise. Thus, the tax will bring in a consistent $1.23 billion in new revenue each year, with rates adjusting to keep collections constant.

Gas taxes can be relatively good taxes, particularly when the revenue they raise is dedicated to transportation infrastructure, as the tax then represents something approaching a user-pays model. There is certainly a strong argument for funding roads and bridges using gas taxes as opposed to relying on general revenue, and, therefore, for ensuring that gas tax revenue actually flows to transportation projects. On that score, New Jersey voters will have the opportunity to decide this November whether to dedicate all money from the gas tax exclusively to transportation projects.

As offsets to the gas tax increase, the recently enacted tax package also raises the amount of retirement and pension income that is excluded from income taxation. Currently, married couples filing jointly do not owe income tax on the first $20,000 a year in retirement income. This threshold is now set to increase by $20,000 a year through 2020, after which it will continue to stand at $100,000. Single taxpayers will see the exemption rise from $15,000 to $75,000 over that period. Coupled with a veterans’ exclusion, this will result in a $83 million to $113 million tax reduction in fiscal year 2018, rising to $110 million to 157 million by fiscal year 2022.

The state’s earned income tax credit, which currently stands at 30 percent of the federal level, will increase to 35 percent, at a cost of $70.5 million per year by fiscal year 2022. The state sales tax, meanwhile, will decrease from 7 percent to 6.875 percent on January 1, 2017, and decline further to 6.625 percent a year thereafter, a tax cut of $655 million a year by fiscal year 2022.

Last but not least, the tax reform package phases out New Jersey’s estate tax over two years, by raising the exclusion from $675,000 to $2 million as of January 1, 2017, and then repealing the estate tax outright as of January 1, 2018 (a tax cut of $562 million a year by fiscal year 2022). The state will continue to impose an inheritance tax; it is currently one of only two states to impose both an estate and an inheritance tax, which has a particularly strong adverse effect on family-owned businesses.

Between fiscal years 2017 and 2022, the tax package will result in an estimated $800 million to $1 billion in additional taxes, though the tax package represents a tax cut in aggregate in the out years. In fiscal year 2017, the nonpartisan Office of Legislative Services estimates that the tax cut components of the plan will bring in $544.4 million in additional revenue, as few of the offsets will have phased in. By fiscal year 2019, the tax cut component will reduce revenues by $1.07 to $1.11 billion per year, while the increase in the gas tax will bring in $1.23 billion, for a slight revenue boost. In subsequent years, however, the cuts will be larger than the new gas tax revenue. By fiscal year 2022, the tax cuts will total an estimated $1.40 to $1.44 billion, above the consistent $1.23 billion brought in by the gas tax increase, resulting in a modest revenue reduction.

By my calculations, this is actually a tax cut. Using "math" I summed the revenue changes from 2017-2022 and find that tax revenues rise by $800 million to $996 million. Overall tax revenue will become negative (i.e., a tax cut) sometime between 2026 and 2028 (later if we use a positive discount rate ... e.g., sometime between 2028 and 2032 at a 5% discount rate).

And, in case you are wondering if "the path to climate action is through the Republican Party":

The tax increase hasn’t even gone into effect yet and already, two Republican state senators have filed legislation to repeal the deal. 

Obamacare-style.