Environmental Economics

We've been back for a week and we're already influencing the news!

John kindly pointed out that the scumbags (technical term) at this high quality (sarcasm) 'news' aggregation site  stole my post from last week with no attribution. Funnily enough when I just went to the site to find the url, the lead story is John's post from three hours ago! 

AND...if you go to their News page, almost all of the content is from me and John.

So I sent a message to their general enquiries email address ([email protected]):

    "Please stop copying our content without attribution. If this continues you are going to make me mad. And you wouldn’t like me when I’m mad."

                                                                                                                                                                                            --David Banner (The Hulk)

Feel free to spam them yourself.

When you're dealing with the current EPA administration, the humor writes itself

Really, could you have made this up?

Hat Tip: Paul Jakus

 

My new autoresponse to appstate.edu emails

Hello,

John Whitehead is happy to report that he is no longer a part-time academic administrator (i.e., Economics Department Chair). If your email is regarding department business, please redirect it to our new chair Todd Cherry at cherrytl at appstate.edu.

John Whitehead is also happy to report that he is on Off-Campus Scholarly Assignment (i.e., sabbatical) in Fall 2017 and back to teaching, research and service in Spring 2018. If your email is about non-department business, he'll reply ASAP (or maybe not).

Thanks,

John Whitehead

P.S. For the remainder of his academic career, John Whitehead will refer to himself in the third person.

A history of the Exxon funded CVM debate makes it to twitter ... in case you are missing it, there is a more recent BP funded CVM debate @Undercoverhist

1/ Looooong tweetstorm on use of contingent valuation method in Exxon Valdez case & what it says on how economics science & expertise work pic.twitter.com/SohMYTwnh7

— Beatrice Cherrier (@Undercoverhist) June 25, 2017

These 48 tweets cover the article that Tim posted earlier and also this one by Spencer Banzhaf (who alerted us to the Maas and Svorcencik article): 

Banzhaf , H. Spencer, Constructing Markets: Environmental Economics and the Contingent Valuation Controversy (October 21, 2016). History of Political Economy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2959427.

Having lived through it [see below], I thought I knew everything about the CVM debate but still learned something new. For example: Diamond, Hausman and McFadden did not collect any of the Exxon-funded data (i.e., write the surveys, focus group, pretest and field the surveys). It seems that it was collected by others [*.pdf] and then, given their prominence in the profession, Diamond, Hausman and McFadden did the econometrics. 

Tweets 4 and 5 say:

4/Rather than countering w/ alternative estimates, Maas&Svorencik explain, Exxon casted doubt on method itself: contingent valuation (CV)

5/Unlike tobacco/climate cases, Exxon did NOT manufacture doubt, but tapped into EXISTING debates on scientific character of CV among econs

Being economic history, neither of these articles mention the brand new BP funded critique of CVM. It is clear that BP is following the same game plan as Exxon. Here is my recommended readings on the CVM Debate - Part Deux:

1. Carson, Richard T. "Contingent valuation: A practical alternative when prices aren't available." The Journal of Economic Perspectives 26, no. 4 (2012): 27-42.
2. Hausman, Jerry. "Contingent valuation: from dubious to hopeless." The Journal of Economic Perspectives 26, no. 4 (2012): 43-56.
3. Kling, Catherine L., Daniel J. Phaneuf, and Jinhua Zhao. "From Exxon to BP: Has some number become better than no number?." The Journal of Economic Perspectives 26, no. 4 (2012): 3-26.
4. [*] Desvousges, William, Kristy Mathews, and Kenneth Train. "Adequate responsiveness to scope in contingent valuation." Ecological Economics 84 (2012): 121-128.
5. Haab, Timothy C., Matthew G. Interis, Daniel R. Petrolia, and John C. Whitehead. "From hopeless to curious? Thoughts on Hausman's “dubious to hopeless” critique of contingent valuation." Applied Economic Perspectives and Policy 35, no. 4 (2013): 593-612.
6. [*] Desvousges, William, Kristy Mathews, and Kenneth Train. "An adding-up test on contingent valuations of river and lake quality." Land Economics 91, no. 3 (2015): 556-571.
7. Dickinson, David L., and John C. Whitehead. "Dubious and dubiouser: Contingent valuation and the time of day." Economic Inquiry 53, no. 2 (2015): 1396-1400. [note: published in the Miscellany section]
8. [*] Desvousges, William, Kristy Mathews, and Kenneth Train. "From Curious to Pragmatically Curious: Comment on “From Hopeless to Curious? Thoughts on Hausman's ‘Dubious to Hopeless’ Critique of Contingent Valuation†”." Applied Economic Perspectives and Policy 38, no. 1 (2016): 174-182.
9. Haab, Timothy C., Matthew G. Interis, Daniel R. Petrolia, and John C. Whitehead. "Interesting Questions Worthy of Further Study: Our Reply to Desvousges, Mathews, and Train's (2015) Comment on Our Thoughts (2013) on Hausman's (2012) Update of Diamond and Hausman's (1994) Critique of Contingent Valuation." Applied Economic Perspectives and Policy 38, no. 1 (2016): 183-189.
10. Whitehead, John C. "Plausible responsiveness to scope in contingent valuation." Ecological Economics 128 (2016): 17-22. [note: this is a comment on DMT (2012) that grew into a full length paper with original content]
11. Chapman, David J., Richard C. Bishop, W. Michael Hanemann, Barbara J. Kanninen, Jon A. Krosnick, Edward R. Morey, and Roger Tourangeau. "On the adequacy of scope test results: Comments on Desvousges, Mathews, and Train." Ecological Economics 130 (2016): 356-360.
12. [*] Desvousges, William. "Reply to ‘On the adequacy of scope test results: Comments on Desvousges, Mathews, and Train’." Ecological Economics 130 (2016): 361-362.
13. Poe, Gregory L. "Behavioral Anomalies in Contingent Values and Actual Choices." Agricultural and Resource Economics Review 45, no. 2 (2016): 246-269.
14. Whitehead, John C. "A Comment on 'An Adding Up Test on Contingent Valuations of River and Lake Quality'”. Appalachian State University Department of Economics Working Paper No. 17-01. 2017.
15. Bishop, Richard C., Kevin J. Boyle, Richard T. Carson, David Chapman, W. Michael Hanemann, Barbara Kanninen, Raymond J. Kopp et al. "Putting a value on injuries to natural assets: The BP oil spill." Science 356, no. 6335 (2017): 253-254.
16. [*] McFadden, Daniel, and Kenneth Train, eds. Contingent Valuation of Environmental Goods: A Comprehensive Critique. Edward Elgar Publishing, 2017.
17. Whitehead, John C. "A Replication of Willingness-to-pay Estimates in ‘An Adding Up Test on Contingent Valuations of River and Lake Quality’ (Land Economics, 2015)." unpublished manuscript, June 2017.

BP funded research is indicted by the [*]. 

Other than this:

Whitehead, John C., "Natural Resource Damage Assessment … May be Hazardous to Your Health," AERE Newsletter 36(2):32-38, November 2016.  [Download Aere newsletter november 2016 finalmv revised -essay]

What have I missed on my reading list?

The new EPA

More cuts er...non-renewals for the EPA Board of Scientific Counselors:

U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt continues to clean house at a key advisory committee, signaling plans to drop several dozen current members of the Board of Scientific Counselors (BOSC), according to an email yesterday from a senior agency official.

All board members whose three-year appointments expire in August will not get renewals, Robert Kavlock, acting head of EPA's Office of Research and Development, said in the email, which was obtained by E&E News.

Because of the need to reconstitute the board, EPA is also canceling all subcommittee meetings planned for late summer and fall, Kavlock said.

"We are hopeful that an updated BOSC Executive Committee and the five subcommittees can resume their work in 2018 and continue providing ORD with thoughtful recommendations and comments," he wrote in urging departing members to reapply.

The board, whose members are chosen by Pruitt, advises EPA on technical and management issues related to its research programs. First-term board members typically receive a second three-year reappointment. Last month, however, Pruitt broke with that tradition in opting not to renew the appointments of nine BOSC members. The new round of non-renewals will bite much deeper, BOSC Executive Committee Chairwoman Deborah Swackhamer, a University of Minnesota science professor, indicated in an email today to E&E News.

Of 49 remaining subcommittee members, 38 will not be renewed at the end of August, leaving a total of 11, she said. None of the subcommittees will have a chair or vice chair, Swackhamer said, while the executive committee will have three members. While EPA is already seeking nominations to fill out the board, the deadline is the end of next week, she noted.

I don't know the names of all of those cut, but I know of one colleague from my department who has been cut (and is less than pleased).  

When the first round of non-renewals became public last month, an EPA spokesman noted that reappointments were not guaranteed and that the agency wanted to ensure fair consideration of all nominees for advisory board posts.

In a statement today, spokeswoman Amy Graham said the agency is grateful for the service of BOSC members and is encouraging those with expiring terms to reapply.

"We are taking an inclusive approach to filling future BOSC appointments and welcome all applicants from all relevant scientific and technical fields," Graham said.

But the first round sparked backlash from congressional Democrats and accusations that Pruitt is seeking to make room for industry representatives who will undercut the integrity of the board's work.

"This says to me that they do not want objective science," Peter Meyer, an economist who resigned in protest last month, said in an interview this morning.

The Washington Post version of the story has this little additional nugget:

This appears to be just the start of advisory committee changes at the EPA. The agency’s Science Advisory Board (SAB) and Clean Air Scientific Advisory Committee (CASAC) also likely will be changed in the future.

One senior administration official, who spoke on the condition of anonymity to discuss ongoing conversations, said that a segment of the Scientific Advisory Board rotates off each year and the agency will issue a Federal Register notice in the next couple of weeks that will invite applicants to replace those members whose terms are expiring.

“EPA is currently deliberating next steps for the SAB and CASAC,” said one senior agency official, who spoke on the condition of anonymity because no final decision has been made.

And yes, I know someone on an SAB subcommittee too. Actually I know a lot of people on SAB subcommittees, but I was referring to me.

I always use gmail when I have something interesting to say to Tim

Jonathan Rees:

Earlier this year, word broke that the University of California system secretly established a way by which it could monitor and read faculty emails. It defies belief that the UC system is the only one to do so. As is the case with any employer these days, your college or university can read your .edu email because it wants to target you for some reason. It can also read your work email for kicks. ...

Using a private email account is not really private when you’re conducting what the state deems to be public business. “As Hillary Clinton has learned the hard way, using your personal email account when doing government work doesn't make the content of those emails exempt from public records laws,” noted a 2015 story about former University of Illinois Phyllis M. Wise. She used private emails to get around public records requests from Steven G. Salaita’s legal team, and resigned from her post after those emails were released.

The same dynamic applies to faculty — as William Cronon, a history professor at the University of Wisconsin at Madison, found out when the state Republican party filed the equivalent of a Freedom of Information Act request for his university emails. Cronon could have corresponded through private email. With no lawsuit over the matter, those emails might never have been subpoenaed. But had there been a lawsuit, they could have been subpoenaed, as the Wise example suggests.

It’s impossible for faculty to get total protection from having our email observed. But we can make it a little harder to have our email quite so easily monitored by our employer. Here’s how:

• If you don’t have a personal email account, get one.
• If you do have a personal email account, don’t be afraid to use it more often.
• Make a conscious, intellectually defensible decision about what your employer and the public has a right to know about your job and what they don’t.
• Then divide your email activity accordingly. Yes, you should still worry that whatever you write could be accessed by people whose interests are far different from your own, but you shouldn’t make it easier for them to see your electronic correspondence just because you think your Gmail account seems unprofessional.

Most faculty may never have to worry about these issues. However being cautious will greatly increase the chances that you will be able to maintain at least a modicum of privacy in the course of doing your job.

Source: https://chroniclevitae.com/news/1535-nobody-cares-about-your-edu-anymore. 

I always assume that someone is reading every email I send from appstate.edu. And I have those twisted gut feelings for days afterwards when I write something that I shouldn't. I make fun of env-econ readers with Tim via gmail and I thought it was safe. Now I guess it will be mostly via text or musical.ly.

Friday Dancing Economist Post

I figure since John put it on Facebook, I can put it here...

 

I'm at that point in my career where I'm ready to do something absolutely crazy

And, as always, Matt Kahn makes a timely suggestion:

In the past, I've done some writing on social capital and civic engagement.   I just put the theory to the test by volunteering to serve on USC Econ's PHD Admissions Committee.     USC Economics is world renown for its excellence in econometrics.   With Antonio Bento, Dana Goldman, me and Arie Kapteyn now all at USC (and many other research active Price School faculty),  a talented student can take his/her knowledge of econometrics and apply it to the economics of aging, health, the environment and cities.  There are many exciting possibilities and permutations here.  I strongly encourage serious students to apply. I'm especially interested in attracting students who are graduates from U.S undergraduate institutions.  Please contact me if you have any questions.

For those of you who already have a Ph.D., perhaps it is time for you to do a refresher course to see if you are still at the frontier. It is sunny and 80 degrees today on November 18th 2015 in LA. Can you say the same thing about where you are now standing?

via greeneconomics.blogspot.com

Yes, I'm definitely within the frontier. What could be a better challenge than applying to the PhD program in a top economics department and doing the whole g.d. thing all over again? Of course, I'll need to bone up on my maths. I stopped at integral calculus as an undergrad but it should be fun taking real analysis and whatnot from the folks in Walker Hall. After I get accepted I can only hope to get an assistantship that would allow me and my family to live in the sunny city of angels for 6+ years. But dang, I'm just so excited about thinking a dissertation topic that would apply my new world renown econometrics skills (I've always wanted to be able to write out my own likelihood function in "matlab" ... [is that what the kids call it?]) to some hedonic data!!! And then I could jump in the labor market and go for that R1 job that I've always dreamed about. But, I also have location preferences. I hear that the weather is always wonderful in southern CA. 

Does income inequality cause decreased economic growth?

Rather than read before I go to bed, I have taken to watching Netflix documentaries on the iPad.  I thought this would lead to me falling asleep easier from the boredom of watching documentaries, but instead I find myself actually enjoying them leading to less sleep...and more questions.

Last night I watched Inequality for All, which is former U.S. labor secretary and now Berkeley professor Robert Reich's take on the causes and effects of growing income inequality in the U.S.  I will admit that I was a skeptic going in knowing that Reich in a known socialist who wants to ride tax and spend policies to the Utopia of socialism.  Beyond that, short people got no reason to live*.

Despite my misgivings, I gave Reich's documentary a go, knowing I'd fall asleep in the first 10 minutes.  Two hours later, I found myself scratching my head and questioning my own conservative existence--or at least a little of what I thought before.  I'm not going to go into a lot of detail here, as I still have a lot of thinking to do, but I did want to show you a little of my initial 'research.'

One of Reich's basic premises in Inequality for All is that income inequality causes decreased economic growth.  This is a less than veiled attack on trickle-down arguments.  In short (HA! Get it?  He's 4'11". Get it? Nevermind.)**, Reich argues that when income accumulates at the top of the income distribution, little reinvestment occurs as would be required for trickle-down arguments to work.  Again, I'm not ready to fully question that basic premise, but rather a thought occurred to me: If Reich is right (as opposed to left?), then we should see a negative correlation between measures of income inequality and income growth.  That is, as income becomes less equal, income growth should slow down.  And that is something I can do 'blog-level research' on. 

So here goes.  If we look at the U.S. Gini coefficient (roughly: a measure of income inequality where 0 indicates a uniform distribution and a value of 1 indicates all wealth concentrated with 1 person), from 1980-2013, the simple correlation between the Gini coefficient and GDP growth is -0.06--negative but probably not significantly negative to support Reich's argument.

So there you have it--Reich is a short nitwit who knows nothing about economics or politics or economic policy and Berkeley should immediately move to fire him and put me in his place.  After all, I'm really tall.

Just kidding.  As any good blog researcher knows, in today's hard hitting journalistic era where not just any schmuck can post stuff on the internet with no evidence (pfft), it takes more than one correlation coefficient to prove a point.  So I thought, well, if income inequality causes decreased growth it might take a few years for the effects of today's inequality to affect GDP growth rates.  So I decided to look at the correlation between the Gini coefficient in year X and GDP growth in years X+1, X+2, X+3,...,X+10.

When I did that, an interesting pattern emerged.  Take a look at the graph below: On the horizontal axis is the # of years in the future.  On the vertical axis is the correlation between the U.S. Gini coefficient and GDP growth.  For example, if we are looking at 2 years in the future, the data point represents the correlation between the Gini coefficient from 1980 to 2011 with the GDP growth from 1982 to 2013.  If we are 5 years in the future we are looking at the correlation between the Gini from 1980 to 2008 with GDP growth from 1985-2013.

The pattern that emerged is intriguing enough to add to my list of things that make me go hmmmm***.  As we look 1,2 and 3 years into the future, the correlation between income inequality and GDP growth becomes more and more negative.  That effect seems to start to wear off beyond 3 years and by 10 years is back to the baseline level of very little correlation. 

So what might this mean? 

A) It could mean that if this holds up, Reich is right.  If income inequality increases there seems there could be a negative and lagging impact on GDP growth.  So, if income inequality increases over a period of time, the cumulative effect on decreased GDP growth could be large. Or,

B) It could mean I'm an idiot.

Either way, I'm intrigued.  And I look forward to those more Macro than me to tell me whether A), B) or both are correct.

*Google Randy Newman if you think I'm being mean.

**For those who think my short jokes are insensitive, my wife barely tops out at 5'. 

***Google C+C and the Music Factory

 

Within each of us, ofttimes, there dwells a mighty and raging fury*

John managed earlier today to post an 842 word rant (don't make John angry, you wouldn't like him when he's angry)  over the ridiculousness and arbitrariness of seemingly intelligent researchers choosing choice experiments over contingent valuation based on...well...the ridulous and arbitrary (and wrong) assumption that choice experiments somehow magically avoid the perceived woes of contingent valuation.  I'm not sure I can put it any better than John did, and that's really not my point here.  My point is that John managed to coherently rant for 842 words without citing or linking to this outstanding piece in the December 2013 issue of the journal Applied Economic Perspectives and Policy**.

Inexcusable.

*Click

**Here are the latest download stats (not too shabby, but we can do better with your help!).  You can dowload the paper here: