The Evolving Impact of the Ogallala Aquifer: Agricultural Adaptation to Groundwater and Climate

Agriculture on the American Great Plains has been constrained by historical water scarcity. After World War II, technological improvements made groundwater from the Ogallala aquifer available for irrigation. Comparing counties over the Ogallala with nearby similar counties, groundwater access increased irrigation intensity and initially reduced the impact of droughts. Over time, land-use adjusted toward water-intensive crops and drought-sensitivity increased; conversely, farmers in water-scarce counties maintained drought-resistant practices that fully mitigated higher drought-sensitivity. Land values capitalized the Ogallala's value at $26 billion in 1974; as extraction remained high and water levels declined, the Ogallala's value fell to$9 billion in 2002.

The Enduring Impact of the American Dust Bowl: Short- and Long-Run Adjustments to Environmental Catastrophe

The 1930s American Dust Bowl was an environmental catastrophe that greatly eroded sections of the Plains. The Dust Bowl is estimated to have immediately, substantially, and persistently reduced agricultural land values and revenues in more-eroded counties relative to less-eroded counties. During the Depression and through at least the 1950s, there was limited relative adjustment of farmland away from activities that became relatively less productive in more-eroded areas. Agricultural adjustments recovered less than 25 percent of the initial difference in agricultural costs for more-eroded counties. The economy adjusted predominantly through large relative population declines in more-eroded counties, both during the 1930s and through the 1950s. (JEL N32, N52, Q15, Q18, Q54)Economic

Nature versus Nurture: The Environment's Persistent Influence through the Modernization of American Agriculture

Histor

Price Discrimination and Smuggling of AIDS Drugs

Patent-holding pharmaceutical companies are shown to be imperfectly able to charge differential prices for AIDS drugs due to the potential for black market exchange. Thus, greater segmentation in the international market through additional barriers to smuggling would induce firms to charge lower prices for AIDS drugs in poorer countries. Without these additional barriers, widespread drug distribution through mandated lower prices or weakened patent protection in the developing world would result in smuggling, undercutting demand in developed markets and reducing firms’ research incentives. By contrast, further market segmentation would allow policy makers to go beyond the induced price cuts and remove patent protection in many markets where the benefits to increased distribution would likely outweigh the losses to research incentives.Economic

Identifying agglomeration spillovers : evidence from million dollar plants

December 19, 2007. Revised: April 26, 201

Essays on the development of the American economy

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2009.Includes bibliographical references.The first essay analyzes the impact of the 1930's American Dust Bowl and investigates how much the short-term costs from erosion were mitigated by long-term adjustments. Exploiting new data collected to identify low, medium, and high erosion counties, estimates indicate that the Dust Bowl led to substantial immediate decreases in agricultural land values and revenues. Until at least the 1950's, however, there was limited reallocation of farmland away from activities that became relatively less productive due to erosion. Relative changes in agricultural land values and revenues indicate that the annualized long-term cost was 86% of the short-term cost to agriculture. Substantial out-migration reflects the large cost of the Dust Bowl, and was an important channel through which short-term costs were partly mitigated. The second essay examines the impact on agricultural development from the introduction of barbed wire fencing to the American Plains in the late 19th century. Farmers were required to construct fences to be entitled to compensation for damage by others' livestock. From 1880 to 1900, the introduction and universal adoption of barbed wire greatly reduced the cost of fences, relative to predominant wooden fences, most in counties with the least woodland. Over that period, counties with the least woodland experienced substantial relative increases in settlement, land improvement, land values, and the productivity and production share of crops most in need of protection.(cont.) This increase in agricultural development appears partly to reflect farmers' increased ability to protect their land from encroachment. States' inability to protect this full bundle of property rights on the frontier, beyond providing formal land titles, might have otherwise restricted agricultural development. The third essay quantifies agglomeration spillovers by comparing the growth of total factor productivity (TFP) among incumbent plants in "winning" counties that attracted a large manufacturing plant to "losing" counties that were the plant's second choice. Five years after the opening, incumbent plants' TFP is 12% higher in winning counties. This effect is larger for plants with similar labor and technology pools as the new plant. We find evidence of increased wages in winning counties, indicating that profits increase by less than productivity.by Richard A. Hornbeck.Ph.D

TB159: Drought and Cold Stress-Induced Morphometric Changes in Tree Rings of Red Spruce

Morphometric analysis of individual, key growth rings might provide a way of establishing “fingerprints” or unique patterns for growth rings produced following different natural or anthropogenic stresses.https://digitalcommons.library.umaine.edu/aes_techbulletin/1059/thumbnail.jp

Identifying Agglomeration Spillovers: Evidence from Million Dollar Plants

We quantify agglomeration spillovers by estimating the impact of the opening of a large new manufacturing plant on the total factor productivity (TFP) of incumbent plants in the same county. Articles in the corporate real estate journal Site Selection reveal the county where the "Million Dollar Plant" ultimately chose to locate (the "winning county"), as well as the one or two runner-up counties (the "losing counties"). The incumbent plants in the losing counties are used as a counterfactual for the TFP of incumbent plants in winning counties in the absence of the plant opening. Incumbent plants in winning and losing counties have economically and statistically similar trends in TFP in the 7 years before the opening, which supports the validity of the identifying assumption. After the new plant opening, incumbent plants in winning counties experience a sharp relative increase in TFP. Five years after the opening, TFP of incumbent plants in winning counties is 12% higher than TFP of incumbent plants in losing counties. Consistent with some theories of agglomeration, this effect is larger for incumbent plants that share similar labor and technology pools with the new plant. We also find evidence of a relative increase in skill-adjusted labor costs in winning counties, indicating that the ultimate effect on profits is smaller than the direct increase in productivity.

Bundling Health Insurance and Microfinance in India: There Cannot be Adverse Selection if There Is No Demand

Microfinance institutions have started to bundle their basic loans with other financial services, such as health insurance. Using a randomized control trial in Karnataka, India, we evaluate the impact on loan renewal from mandating the purchase of actuarially-fair health insurance covering hospitalization and maternity expenses. Bundling loans with insurance led to a 16 percentage points (23 percent) increase in drop-out from microfinance, as many clients preferred to give up microfinance than pay higher interest rates and receive insurance. In a Pyrrhic victory, the total absence of demand for health insurance led to there being no adverse selection in insurance enrollment.National Institutes of Health (U.S.) (Grant PO1 HD061315-04