Environmental Economics

Quote of the Day: Yep, I'm REALLY that guy

"Are you REALLY the guy that wrote that book on nonmarket valuation?"

Nameless graduate student, to me, at lunch today

Context: I was honored to give the keynote address to open the International Society of Forest Resource Economics Annual Meeting, this morning (Proof here because I know most of you don't believe I would be invited to do this--I was invited because it was on campus and I was wiling to do it for free).  Because the audience was supposed to be* a mix of academics, industry-types, government officials, and graduate students, I decided to give the keynote blog-style (non-technical and UNscholarly).  Filled with anecdotes, and cartoons, and jokes, I talked about Revisiting the Principles of Economics: Lessons from Environmental and Resource Economics. 

I guess my approachable presentation style belies my academic credibility. 

*Turned out to be an all academic audience.  The one gov't rep in the room (Chief of the Ohio Department of Natural Resources Division of Forestry) came up to me afterwards and said "Yours was that best presentation of the day...or at least it was the only one I sort of understood."  At least I made one person happy.  

 

My new working paper (with Giguere and Moore)

Valuing Hemlock Woolly Adelgid Control in Public Forests: Scope Effects with Attribute Non-Attendance
Chris Giguere, Chris Moore and John C. Whitehead

No 18-07, Working Papers from Department of Economics, Appalachian State University

Abstract: Sensitivity to the scope of public good provision is an important indication of validity for the contingent valuation method. An online survey was administered to an opt-in, or non-probability sample, panel in September 2017 to estimate the willingness-to-pay to protect hemlock trees from a destructive invasive species on federal land in North Carolina. We collected survey responses from 907 North Carolina residents. We find evidence that attribute non-attendance is a factor when testing for sensitivity to scope. When estimating the model with stated attribute non-attendance the ecologically and socially important scope coefficients become positive and statistically significant. Key Words:

Date: 2018
References: Add references at CitEc
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Downloads: http://econ.appstate.edu/RePEc/pdf/wp1807.pdf 

5 out of 7 continents isn't bad, right?

We're working on PhD recruitment this week (if you applied to OSU AEDE and were accepted, join us, we're FUN!).  I put together a Google map with our PhD placements since 2007.  A bit scary that I might be influencing thinking for this many people and this wide an area.   

 

Field research: Here I am doing what it takes* to effectively field a stated preference survey

*Doing what it takes: "Hiking" the 4.8 mile roundtrip Grandfather Trail (the last half mile featured thunder, lightning, pouring rain and some hail) at Grandfather Mountain State Park to better understand Hemlock Woolly Adelgid (I think that dead tree in the middle is a Hemlock). The last time I hiked this trail was 7 years ago (enough time to forget how difficult it is) and resulted in my rugged profile picture. Here is another picture from the hike (about 20 minutes before the storm began): 

Crowdsourcing Christmas tree retail market prices

I paid $60 for an ~8 foot tree at the choose and cut lot on Poplar Grove (Boone, NC):

For the past several years, I’ve bought my Christmas tree from a stand around the corner from my apartment in Brooklyn. It was always the same, simple price: $10 per foot, which seemed reasonable when I was buying a 5-foot tree for my tiny little walkup. This year, I moved to an apartment with a proper living room and decided to go big. I wanted a tree that was taller than I am. The stand in my new neighborhood charges less — $9 per foot — but I was going for a 6-footer, and something about crossing the $50 Rubicon didn’t sit well with me.

So I took to Twitter to try to gain some perspective.

Ultimately, I got about 150 responses from 29 states. Not the most comprehensive data set, but some interesting results. The cheapest tree, other than for those who cut their own, was in Corvallis, Oregon, for $3.10 per foot. That makes sense, because there are trees everywhere in Oregon.

The most expensive tree I heard about was $35.71 per foot in the Culver City area of Los Angeles. That also makes sense, because LA is ridiculous in every way.

Overall, the average price was $8.70 per foot. Here’s where I got responses from.

Most interesting to me, though, was the variation in results within an area. Take a look at New York City, for instance. In Hell’s Kitchen, on the western side of Manhattan, you can buy a tree for $6.66 per foot. (It is Hell’s Kitchen after all.) But walk a few blocks south to Chelsea, and somebody’s charging $20 per foot. In a place like New York, where many people don’t have cars, vendors can set the price knowing that many people won’t be comparison shopping. ...

I guess it’s no surprise that different neighborhoods have different pricing. I spoke with several tree vendors here in New York who all confirmed that many of the trees come from the same supplier (they are shipped down from Canada). But the price is set according to what the hyper-local market will bear. Sure enough, I stopped by my old neighborhood, which is rapidly gentrifying, and they’d bumped up the price to $11 per foot this year.

The one thing I heard consistently, though: If you really want to negotiate for a good price, wait till Christmas Eve. It’s a buyer’s market.

via fivethirtyeight.com

How to take a forest bath: Step 1, find a forest. Step 2, walk.

Apparently what we used to call a nature walk (or a stroll through the park, or a walk in the woods) is now a form of meditation:

To give shinrin-yoku a try, choose a spot based on physical ability and convenience. Do not choose a route that is too strenuous: It is recommended that in four hours, you should walk no more than three miles. This is not an endurance hike. Rest when necessary and find a spot where it is pleasant to sit and read for a while or simply look out into the trees. It is OK to bring water or green tea. It is also recommended that, if possible, a forest bath is followed up with a hot spring bath.

...and the hot spring bath followed with a Mr. Bubbles bubble bath.   

If only John Muir, or Emma Gatewood, or Thoreau, or Bill Bryson were alive to see this. 

Oh, wait, Bryson is alive.

Raise your hand if you want to work with me...

The Department of Agricultural, Environmental, and Development Economics (my department) in the College of Food, Agricultural and Environmental Sciences (my college) at The Ohio State University (my university) is hiring for four new faculty positions--and I am not ashamed of taking advantage of this blog to promote the positions.  If you have (or are close to earning) a PhD with interests in agricultural economics, environmental economics, regional economics, development economics or some combination of those fields along with other interests, then we can probably align your interests with one of our four positions. 

Come join me in a top rated department (according to the National Research Council at least) in a top 20 public university (according to US News at least) in the Best Opportunity City in the U.S. (according to Forbes at least).

Our open positions are:

• Assistant or Associate Professor in Global Economic Modeling: a tenure-track assistant/associate professor position in the area of global economic modeling and integrated assessment. Economic modeling approaches of particular interest include dynamic optimization and computable general equilibrium modeling, as well as familiarity with approaches for handling decision making under uncertainty. Individuals with experience integrating economic models with physical/biological models are encouraged to apply.
• Assistant or Associate Professor in Sustainable Food and Farm Policy:  tenure-track assistant/associate professor position to conduct innovative research on policies related to food, farming and sustainability and to provide intellectual leadership to the Department and to the University’s Discovery Theme Initiatives in the area of sustainable food and farm policy. 
• Assistant Professor in Agribusiness: a tenure-track assistant professor with teaching and research responsibilities in agribusiness.  Applicants with interests in agricultural markets and marketing, finance, supply and demand analysis, industrial organization, international trade or agricultural and food policy, that complement a primary interest in agribusiness are encouraged to apply.
• Assistant or Associate Professor in Sustainable Development and Economy: an assistant/associate professor, tenure-track position to develop an internationally recognized program of research and teaching focused on sustainable development and the trade-offs among economic development, social equity and environmental protection in international or regional contexts.  Areas of interest include, but are not limited to: economic growth; equity; resource use; technological change; socio-ecological systems; sustainable and resilient communities. 

Click on the links for full descriptions and application info.  

Bourbon barrel economics

From the inbox:

Bourbon Feels the Burn of a Barrel Shortage
by: Tripp Mickle
May 12, 2015

TOPICS: Supply and Demand

SUMMARY: Distilleries are navigating a bourbon-barrel shortage, as increased demand for the drink coincided with reduction of logging of the white oak wood. Prices of barrels are up sharply. The shortage reflects a supply-chain conundrum. Upstream, barrel makers face a wave of demand because a half dozen established bourbon distilleries and 300 new, craft distilleries are increasing production amid a bourbon boom. Downstream, they face a shortage of white oak wood used in barrels because the lumber industry hasn't rebounded from the housing market's collapse.

CLASSROOM APPLICATION: Students can evaluate the effect of an increased demand for bourbon barrels and white oak in general and the decrease in the supply of white oak on the equilibrium price of bourbon barrels.

QUESTIONS: 
1. (Introductory) Is the demand for bourbon barrels a derived demand?

2. (Introductory) What has caused the increasing demand for bourbon barrels? What has caused the increasing demand for white oak?

3. (Advanced) What has caused the decreased supply of white oak?

4. (Advanced) "Leroy McGinnis's Missouri-based company, McGinnis Wood Products Inc., gets about four email requests a day for barrels. He turns most down. Like many of his competitors, he has only enough capacity and wood to fill orders from longtime customers. The rest go on a waiting list, perpetuating a bourbon barrel shortage now entering its third year." Should Mr. McGinnis raise prices so as to eliminate the excess demand for his company's barrels?

Reviewed By: James Dearden, Lehigh University

Here are the quantities:

And from the article:

The logging industry last year rebounded to produce 8.6 billion board feet as the housing market recovered. But the white oak supply hasn’t caught up with demand from barrel makers. There was plenty of white oak to harvest, but not enough loggers to cut it, forestry experts say. “So many logging firms that went out of business or shrunk in size, their capacity was limited,” said Jeff Stringer, a University of Kentucky professor of hardwood silviculture and forest operations.

 

Clarification of the potential for Ash-holes in Ohio

Yesterday I posted an update on the interminable and undeterable march of the invasive Emerald Ash Borer through Ohio.  In the related story, it was stated:

The emerald ash borer is an invasive species from Asia that destroys vital tissue beneath the bark. State officials estimate there are 3.8 billion ash trees in Ohio.

This number sounded high to me (considering that NASA estimates there are 400 billion trees worldwide).  Rather than do my own research I decided to ask a resident forestry, environmental, carbon and climate change economics expert, Dr. Brent Sohngen.  

Here's the exchange:

Me: Does this strike you as odd?  “State officials estimate there are 3.8 billion ash trees in Ohio.”

Brent: No that’s probably right.  They are all over the forests.  This probably counts lots of little trees.

Me: NASA says 400 billion trees worldwide.  1% of world trees are Ohio Ash?

Brent:  You’re right.  They’re off by an order of magnitude.  USFS says 283 million ash trees in Ohio…

Lesson learned: I was right. Just like every argument I have at home.  Only the exact opposite.

The USFS Forest Inventory can be found here:  It looks like either the reporter or the state official confused the total number of trees in Ohio (4 billion) with the number of Ash trees in Ohio (283 million).

I haven't given you an Ash-hole update in a while

John's Mark Trail post from earlier reminded me to post this update on the Ohio Emerald Ash Borer invasion from hell:

Central Ohio has been especially hard hit by the ravages of a killer insect that has destroyed tens of thousands of majestic ash trees the last few years.

The Columbus Dispatch reports that American Electric Power has a crew dedicated to cutting down dead and dying ash trees before they fall on power lines. AEP took down 13,000 ash trees last year alone.

The city of Columbus has spent about $4.5 million to remove 17,000 ash trees since 2011. The removal of 450 ash trees on a city golf course has dramatically altered its layout.

The emerald ash borer is an invasive species from Asia that destroys vital tissue beneath the bark. State officials estimate there are 3.8 billion ash trees in Ohio.

via www.10tv.com

The strategy for Ash borer control still puzzles me.  Ohio preemptively cuts Ash trees to prevent Ash trees from dying from invasion.  I get the idea--stop the spread here before it spreads somewhere else, but it still seems, well, Ash-backwards

And 3.8 billion Ash trees?  Does that seem high to anyone else?

According to NASA, in 2005 there were about 400 billion trees in the world.

That means that almost 1% of the world's trees are Ash trees in Ohio despite Ohio having less than 0.08% of the world's land area. 

Can that be right?