University of Minnesota, Duluth
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The Welfare Consequences of Government Budget Closure Assumptions Under New Environmental Policies
Get PDFRecent subsidy-based environmental policies directly affect the government’s budget. Computable general equilibrium (CGE) models used to assess the costs and benefits of environmental policies typically assume a fiscal closure rule that holds government consumption fixed meaning budget shortfalls or surpluses induced by a policy are reconciled through transfers or the tax system. Revised guidance for regulatory analysis in the United States suggests that this closure rule potentially be considered in sensitivity in economy-wide analysis of environmental policies. In this paper, we shed light on instances when the closure rule may or may not be an important dimension of a policy analysis by modeling the overall welfare, emissions, and distributional consequences of different closure assumptions across a range of CGE models with different dynamics and policy types. We find that the closure rule does not create significant deviations in overall welfare unless a policy induces direct budgetary imbalances (e.g., tax or subsidy). Further, the choice of the balancing instrument can lead to very different distributional impacts and for lump sum transfers, distributionally neutral closure rules come at virtually no cost. Finally, Ricardian Equivalence, or the inconsequentiality of when the budget imbalance occurs, holds for debt-financed imbalances for lump sum transfers only (e.g., not for changes to tax rates)
Timing Matters: Estimating within-day variation in the rebound effect
No full textTravel demand and congestion fluctuate throughout the day, but temporal heterogeneity in travel demand elasticities is often overlooked. I estimate within-day variation in the fuel economy elasticity of travel demand, illustrating the timing of the rebound effect — when higher fuel efficiency standards increase mileage by decreasing per-mile costs. I find that drivers are most elastic during peak demand periods that coincide with morning and evening commuting hours. Mode switching for shorter commute trips in areas with low-cost alternatives appears to drive much of the within-day heterogeneity. Further, accounting for temporal heterogeneity in the rebound effect has the potential to determine whether the congestion costs of a fuel economy improvement exceed the pollution benefits
Occupational Affiliation and the Incidence of Environmental Regulation
Get PDFWe study the role of occupational heterogeneity in determining the economy-wide costs and incidence of regulation. The labor market represents an important pathway through which the costs of regulation are distributed, and empirical research has suggested that occupational heterogeneity is crucial to explaining labor market outcomes. However, most computable general equilibrium models used to assess the costs and incidence of energy and environmental policies assume a single labor type that can easily shift from one occupation to another, missing a potentially important characteristic of the labor market. We investigate the implications of labor market heterogeneity by modeling the limits it imposes on labor mobility and substitution in the supply and demand of occupations within a computable general equilibrium model. We use this framework to evaluate the social costs and incidence of a suite of large illustrative environmental regulations. We find that occupational heterogeneity, and its impacts on labor mobility, has limited implications for aggregate social costs but plays a key role in understanding how those costs are distributed across households. Depending on the composition of compliance activities, accounting for occupational heterogeneity can shift the burden of regulatory costs from high-income to low-income households or vice versa
Construction and Application of the Micro-level Engineering, Environmental, and Economic Detail of Electricity (MEEDE) Dataset, Version 2
Get PDFThe Micro-level Engineering, Economic, and Environmental Detail of Electricity (MEEDE, Version 2) dataset provides a unit-level representation of the United States electricity sector based on public sources. The data draw on a disparate set of engineering, environmental, and economic data, primarily from the Environmental Protection Agency and the Department of Energy's Energy Information Administration, to characterize all utility-scale electric generating units in the U.S. in terms of their physical inputs of energy, outputs of electricity and pollution, generating and pollution control equipment configurations, and economic costs (capital, labor, energy, and materials) associated with their operation. The combination of complete unit-level physical details of the US grid with economic characteristics is a key distinction between the MEEDE data and other publicly-available sources. The MEEDE data provide a highly-valuable tool for generating descriptive statistics and supporting advanced partial or general equilibrium modeling efforts that require technology-rich representations of the U.S. electricity grid. We demonstrate how these data can be integrated into social accounting matrices for use in economy-wide modeling applications
A Crude Palm Oil Industry Concentration and Influencing Factors: A Case Study of Indonesia as the World's Largest Producer
Get PDFThe Crude Palm Oil (CPO) industry is one of the plantation commodities that has a strategic role in Indonesia's economic development. The number of companies and CPO production is always increasing, but the concentration of the industry that always decreases every year makes it important to analyze the factors that affect the concentration of the CPO industry in Indonesia. The data period used in this study was from 2001 to 2020. In this study, data sources were obtained from the Central Bureau of Statistics (BPS) Indonesia, Word Bank, and UN Comtrade. The data analysis method used is regression analysis of the Error Correction Model (ECM). The results showed that technical efficiency has a negative and significant relationship both in the long and short term to the concentration of the CPO industry. Competitiveness in the long term has a positive and significant relationship, while in the short term it is negative but not significant to the concentration of the Indonesian CPO industry. In the long run, the relationship between RSPO and Indonesia's CPO industry concentration tends to be negative but not significant, while in the short term it shows a significant influence. World CPO prices, both long-term and short-term, provide a positive and significant correlation to the concentration of the Indonesian CPO Industry. Indonesia's CPO exports in the long and short term have a negative and significant effect on the concentration of the Indonesian CPO industry
The Impact of Information and Communication Technology (ICT) on Pesticides Use of Potato Farmers in Indonesia
Get PDFReducing pesticides is an important driver in preserving a healthy and sustainable environment and protecting human health. In the digital era, understanding the role of information and communication technology (ICT) on pesticide use in crucial. Therefore, This study aim to estimate the impact of ICT on farmers’ pesticide used. This study uses a cross-sectional data from a survey to 150 farmers in Indonesia. Furthermore, the data is analyzed by ordinary least square (OLS) and instrumental variable quantile regression (IVQR). The main results indicate that ICT has an essential impact on pesticide used reduction. Farmers who has access on the ICT tend to use lower pesticide that the farmers who did not use the ICT. The IVQR results, make the claim more robust, which is show a negative and significant impact of ICT on farmers pesticide use in all quartile groups. Therefore, this finding implies that there is a need to develop agriculture related ICT continuously among smallholder farmers to reduce the pesticide use
The Role of Social Media on Green Food Consumption Intention in Hanoi, Vietnam
Get PDFThis study aims to discuss the role of social media in shaping consumer attitudes in the Vietnamese context. The research examines the impact of green attitude, green customer value, and social media on environmental concerns, subjective norms, and perceived green value concerning green consumers' food purchase intention. The study utilizes data from a survey conducted among 483 consumers in Hanoi, Vietnam, and adopts the Theory of Planned Behavior (TPB) as the initial framework for studying green food purchase intention. We modify and extend the TPB model by incorporating cultural, social, and personal psychological factors relevant to green food consumption. The findings of this study contribute to the understanding of the factors influencing consumer purchase intention in Hanoi, Vietnam. The results demonstrated the influence of social media on subjective norms, environmental concerns, and perceived green value, which in turn affect green food purchase intention among Vietnamese consumers. These results imply that to increase green food preferences among consumers, governments should also consider social media-based education programs to build an understanding of green food and sustainable consumption and emphasize the outstanding benefits of green products for the environment and society. In addition, marketers should pay attention to providing complete information and advertisements about green food products on social media
Regional Heterogeneity in Livelihood Strategies and Its Implications for Household Welfare: A Panel Data Analysis of Rural Vietnam
Get PDFThis study undertakes a meticulous examination of the Livelihood Strategy Diversity Index (LSDI) and its nuanced implications on household welfare in heterogeneous regions of rural Vietnam. Employing a unique panel dataset derived from the Vietnam Access to Resources Household Survey (VARHS) spanning from 2010 to 2018, the study employs both Ordinary Least Squares (OLS) and instrumental variable (IV) methods to investigate the intricate relationship between LSDI and household welfare, with a specific focus on income and dietary diversity. The empirical findings reveal compelling evidence of pronounced regional heterogeneity, highlighting the distinctive impacts of the LSDI on household welfare across diverse geographical areas. This study underscores the importance of region-specific strategies, advocating for a tailored and diversified approach to agricultural activities aligned with the unique context of each region. Furthermore, the findings emphasize the pivotal role of consolidating small plots as a strategic measure to alleviate agricultural land fragmentation, offering valuable insights into region-specific interventions for the enhancement of household well-being, encompassing both income and nutritional diversity
Analysis of Pasture Systems to Maximize the Profitability and Sustainability of Grass-Fed Beef Production
Get PDFPasture systems for grass-fed beef production in the Gulf Coast region were evaluated for profitability and sustainability over the period 2009/2010 to 2011/2012. May-weaned steers were divided into groups and randomly placed into different pasture systems. Data on input usage, output quantities, and carbon emissions were recorded and analyzed. The least complex grazing system yielded higher profit than the most complex, but the most complex produced the lowest greenhouse gas impact. A trade-off was found between profitability and greenhouse gas impact among the systems
Cattle Producers' Willingness to Adopt or Expand Prescribed Grazing in the United States
Get PDFA triple hurdle model estimates cattle farmer willingness to adopt or expand prescribed grazing on pasture in the United States in response to a hypothetical incentive program. Interest in adoption/expansion is estimated first, then willingness to participate in the program, followed by intensity of participation measured as additional acres enrolled. The supply elasticity of enrolled acres with respect to the incentive is 0.13. Nonpecuniary factors inter alia farmer sentiment about stewardship, current farm management practices, farm location, and education are associated with farmer willingness to participate and with participation intensity