Three Essays on Utilizing Spatial Econometrics in Natural Resource Economics related to Water, Health, and Energy

Spatial interaction and the locational structure between observations have recently gained more attention in the field of econometrics for both cross-sectional and panel data analyses. Compared to a non-spatial economic model, a spatial model relaxes the assumption of independency in observations. This research will apply spatial econometrics modeling in three different fields in applied economics: 1) water charge and minimum monthly access charge in West Virginia municipalities, 2) Naloxone access law and opioid overdose deaths among the U.S. states, and 3) ��2.5 concentrations and asthma hospitalizations in Pennsylvania counties. Based on the nature of water resource imposing spillovers in water charge model is inevitable, likewise Naloxone law and ��2.5 concentrations. We expect to see a significant spillover effects in water charge and minimum water access charge as well as Naloxone law and asthma prevalence among observations. In Chapter 2, we apply linear and log-log functional forms plus spatial econometric analyses to a 2014 dataset of 125 municipal water utilities in West Virginia to investigate the determinants of charges for water use and access. The water charges models are consistent with the theory of water cost determination as water source, debt, and economies of size and scale influence what consumers pay for water. Based on model results, groundwater use by utilities is estimated to save household customers in West Virginia over $12.6 million annually. The results for the spatial model indicate that there are moderate spillover effects for both water and minimum access charges among utilities. West Virginia households using municipal water typically pay far below the OECD standard of 3$3.1M (Philadelphia County) and $37,732 (Cameron County). This study highlights the need for a more accurate impact analysis of ambient air pollution on asthma that reflects the impacts on neighboring regions as well. A one ��/�� increase in PM2.5 concentrations throughout all counties in Pennsylvania raises the number of annual asthma hospitalizations by over 1,200, with 26.8% of this increase occurring due to spillover effects. In the case of asthma hospitalization rates from PM2.5 pollution, an appropriate wind direction algorithm is important to identify spillover effects across counties. This essay has been under review in the Journal of Regional Analysis and Policies

Air Quality and Asthma Hospitalization: Evidence of PM2.5 Concentrations in Pennsylvania Counties

According to the World Health Organization, 235 million people around the world currently suffer from asthma, which includes approximately 25 million in the United States. There is substantial epidemiological evidence indicating linkages between outdoor air pollution and asthma symptoms, more specifically between concentrations of particulate matter and asthma. Using county level data for 2001-2014, a spatial panel framework is imposed based upon prevailing wind patterns to investigate the direct and indirect impacts of PM2.5 concentration levels on asthma hospitalization in Pennsylvania. This model controls for population density, precipitation, smoking rate, and population demographic variables. Results show that PM2.5 concentrations as measured at the county level have positive direct and indirect effects on asthma hospitalization. A one-unit increase in PM2.5 in one Pennsylvania county will add, on average $1.29M ($754,656 direct and $539,040 indirect) to total annual asthma hospitalization costs with the state of Pennsylvania. This study highlights the need for realistic and accurate impact analyses of ambient air pollution on asthma that reflects the impacts on neighboring regions as well. In order to capture the spillover effects of health- related impacts from PM2.5 pollution, a wind direction algorithm to identify appropriate neighbors is important

Charges for Water and Access: What Explains the Differences in West Virginia Municipalities?

Applying linear and log-log functional forms plus spatial econometric analyses to a dataset of 125 municipal water utilities, we investigate the determinants of charges for water use and minimum monthly access to water across West Virginia municipalities in 2014. Water charges models are consistent with the theory of water cost determination as water source, debt, and economies of size plus scale influence what household consumers pay for water. Based on model results, groundwater use by utilities lowers water charges and is estimated to save household customers in West Virginia over $3.6 million annually. West Virginia households typically pay far below the OECD standard of 3 to 5% of household income for municipal water, which may explain why socioeconomic factors do not influence minimum charges for access

A Role for Regional Science in Analyzing Water Issues

The World Economic Forum has consistently ranked water crises as one of the top five most impactful issues facing humanity, alongside but not completely separate from issues such as climate change and natural disasters (World Economic Forum, 2019). A growing population and changing climate will only further stress the constrained water system. Acute and ongoing societal disruptions, caused by significant declines in the available quality and quantity of fresh water around the globe, underscore the importance of water to human life and a functional society. The papers in this special issue highlight the role that regional scientists can and should play in informed decision-making related to water at the local, regional, and national scale

Scientific output: labor or capital intensive? An analysis for selected countries

Scientific research contributes to sustainable economic growth environments. Hence, policy-makers should understand how the different inputs—namely labor and capital—are related to a country’s scientific output. This paper addresses this issue by estimating output elasticities for labor and capital using a panel of 31 countries in nine years. Due to the nature of scientific output, we also use spatial econometric models to take into account the spillover effects from knowledge produced as well as labor and capital. The results show that capital elasticity is closer to the labor elasticity. The results suggest a decreasing return to scale production of scientific output. The spatial model points to negative spillovers from capital expenditure and no spillovers from labor or the scientific output

Drinking Water Quality Impacts on Health Care Expenditures in the United States

This paper explores the relationship between episodes of contaminated drinking water and health care expenditures in the United States. The analysis relies on panel data from the 48 contiguous states from 2000 to 2011. We use the population served by public water systems that violate health-based standards of the Safe Drinking Water Act as a proxy for contaminated drinking water. We estimate spatial and non-spatial models and control for factors that may affect per capita health care expenditures including variables that reflect air quality violations along with ability to pay plus demand for and supply of health care services. The results from a Spatial Durbin Model indicate that a 1% decrease in the percentage of population exposed to drinking water quality violations is associated with reductions in in-state and regional effects equal to 0.005% ($0.32) and 0.035$2.26) of per capita health care expenditures, respectively. Drinking water violations have a larger impact on expenditures than air quality violations (whose effects are not statistically different from zero). However, compared to other factors, such as Medicare enrollment and income, the impact of these violations on health care expenditures is relatively small. We find that regional health care expenditure impacts from drinking water violations are substantially greater than in-state impacts. Thus, a regional approach is recommended to addressing drinking water quality improvements

The Impact of Naloxone Access Laws on Opioid Overdose Deaths in the U.S.

Opioid overdose is the leading cause of unintentional death in the U.S. Narcan TM (Naloxone) is a prescription medicine that can reverse overdose effects. This research investigates the effect of Naloxone access laws on overdose death rates using state and temporal variation in the enactment of these laws. We also explore possible spillover effects between Naloxone access laws and overdose death rates across states. Our analyses reveal that when broken down by access law provisions, there exists a mixture of positive and negative effects on overdose death rates depending upon the provision. The results indicate that Naloxone access provisions have regional impacts by influencing overdose death rates within the state enacted and have a spillover effect in neighboring states. The magnitude of spillover effects is larger than direct effects in the states. Looking across multiple provisions, our findings provide no statistical evidence that these laws reduce opioid death rates

Woody Biomass Processing: Potential Economic Impacts on Rural Regions

This paper estimates the economic and environmental impacts of introducing woody biomass processing (WBP) in a rural area in central Appalachia. WBP is among the most promising additions to energy generation portfolios for reducing import dependency and at the same time providing economic opportunity to stimulate regional economies, especially in rural regions where economic development options are often limited. We use an input-output framework to assess regional economic impacts of introducing WBP under three different pathways, fast pyrolysis, ethanol and coal/biomass to liquids. Based on an analysis of local biomass feedstock supply and using the results of life cycle assessments to parameterize the three production functions, we find that the proposed WBP will increase the regional output by $138.1 to$333.3 million dollars; it will increase income by $17.32 to$51.31 million dollars and employment by 218.1 to 1127.8 jobs in the region. Of these impacts, the direct portions are 63% to 77% of the total impact, depending on the chosen pathway. The results from the accompanying environmental assessment show that only the ethanol pathway has both economic and environmental benefits

Woody Biomass Processing and Rural Regional Development

This paper reports on economic and environmental impacts of introducing woody biomass processing in an economically distressed area in central Appalachia, one of the more heavily forested areas in the U.S. Woody biomass is a readily available unconventional energy source that has the potential to boost the rural region’s economy. We use a static regional computable general equilibrium model to assess regional economic impacts of two different WBP production pathways, biomass to ethanol and biomass to biofuel via fast pyrolysis. In an economy with a workforce approaching 160,000, we find that introducing woody biomass ethanol or fast pyrolysis processing would increase regional output by 0.45% and 0.78%, boost jobs by 0.13% and 0.20%, and increase income by 0.16% to 0.26%, respectively. The results from the environmental assessment show that the ethanol pathway is substantially more environmentally friendly than the fast pyrolysis pathway