Department Seminar Schedule

Fall 2011 - Summer 2012

Upcoming Seminars

No additional seminars are scheduled.

Past Seminars

Friday, September 9, 3:30 - 5:00 pm, Room 75 Agriculture Hall. Alan Spearot, International Economics, University of California - Santa Cruz. "Why Trucks Jump:  Offshoring, Product Characteristics and Productivity"

Abstract: Despite close proximity to a low cost neighbor, prohibitive trade policies by the US and Mexico forced the big three auto producers to essentially keep all light truck production at home prior to NAFTA.  In this paper, we study the first wave of light-truck offshoring to Mexico that occurred once these policies were removed by NAFTA.  Using a new dataset that details the extent of offshoring and domestic production for all observable permutations of product characteristics, we ask two simple questions:  What types of trucks jumped the Rio Grande, and how did the subsequent relocation influence domestic productivity?  Our results detail a stark dichotomy in the offshoring decisions in this major manufacturing industry.  At a broad level, our results confirm the canonical models of heterogeneity and FDI, where we find that firms tend to offshore their most successful light-truck platforms (e.g. full size SUVs, full size pick-ups).  However, at more refined levels of aggregation, the results suggest that other mechanisms are at work in determining the composition of FDI.  That is, with capacity installed for a given platform, we find that firms tend to offshore their least successful models, product lines, and varieties within each platform.   Further, the varieties offshored tend to be less-complex to produce, and lower in gross vehicle weight.  Turning to the implications of imports on domestic productivity, we examine the effect of offshoring on plants that are directly exposed to offshoring vis-a-vis plants that are directly exposed to US-specific reallocation.  Indeed, we find a positive association between offshoring exposure and productivity that is not present with US-specific reallocation.

Thursday, September 15, 3:30 - 5:00, Room 75 Agriculture Hall. Amy Ando, Department of Agricultural, Consumer and Environmental Sciences, University of Illinois. Topic: “Economic Valuation of Ecosystem Attributes for Optimal Ecosystem Restoration Design”

Abstract: Sophisticated non-market valuation techniques have been developed by economists to estimate the value to society of goods not sold in the marketplace such as environmental quality and mortality risk reduction. In environmental economics, these value estimates have been used primarily as critical inputs to cost-benefit analyses and to estimate damages for which firms can be held liable after events such as oil spills. In this paper, we demonstrate how a relatively new tool in the valuation toolkit – choice experiment survey methods – can also be used for another important use: guiding complex decisions about how best to carry out and manage ecosystem restoration projects.  We use a choice experiment survey of Illinois residents to estimate willingness to pay (WTP) for different attributes of restored grassland ecosystems: species richness, bird population density, presence of endangered species, and presence of wildflowers. The results reveal several interesting patterns of consumer preferences and choice. First, we find that the presence of nearby existing grasslands actually increases a respondent’s WTP for restoring a new grassland; this result is counter to what would be expected from neoclassical economics and can possibly be explained by endogenous preferences. Second, we find that respondents treat the conservation success measures (species richness, population density and endangered species) as substitutes for each other; the marginal value of one measure is lower when the levels of the other two measures are high, and contours of total value are concave in pairs of attributes rather than convex. This latter finding implies that value-maximizing grassland design might well display corner solutions in which restoration ecologists maximize the value of a single conservation goal – producing endangered-species havens or duck factories – rather than aiming for balanced bundles of these attributes.

Thursday, November 10, 3:30 - 5:00 pm, Room 75 Agriculture Hall. Kathy Baylis, Department of Agricultural, Consumer and Environmental Sciences, University of Illinois. Topic: “Do our conservation programs work?  A spatially-explicit estimate of avoided deforestation”

Abstract: With the potential expansion of forest conservation programs spurred by climate-change agreements, there is a need to measure the extent to which such programs achieve their intended results. Conventional methods for evaluating conservation impact tend to be biased because they do not compare like areas or account for spatial relations. We assessed the effect of a conservation initiative that combined designation of protected areas with payments for environmental services to conserve over wintering habitat for the monarch butterfly (Danaus plexippus) in Mexico. To do so, we used a spatial-matching estimator that matches covariates among polygons and their neighbors. We measured avoided forest loss (avoided disturbance and deforestation) by comparing forest cover on protected and unprotected lands that were similar in terms of accessibility, governance, and forest type. Whereas conventional estimates of avoided forest loss suggest that conservation initiatives did not protect forest cover, we found evidence that the conservation measures are preserving forest cover. We found that the conservation measures protected between 200 ha and 710 ha (3–16%) of forest that is high-quality habitat for monarch butterflies, but had a smaller effect on total forest cover, preserving between 0 ha and 200 ha (0–2.5%) of forest with canopy cover >70%. We suggest that future estimates of avoided forest loss be analyzed spatially to account for how forest loss occurs across the landscape. Given the forthcoming demand from donors and carbon financiers for estimates of avoided forest loss, we anticipate our methods and results will contribute to future studies that estimate the outcome of conservation efforts.

Thursday, December 1, 10:30 am - 12:00 noon, Room 75 Agriculture Hall. Stephen Polasky, Fesler-Lampert Professor of Ecological/Environmental Economics, Department of Applied Economics, University of Minnesota. Topic: "Optimal conservation with spatially-dependent benefits and asymmetric information." This seminar is joint with the Environmental Science and Policy Program.

Abstract: Many ecosystem services are public goods whose provision depends on the spatial pattern of land use at landscape scales.  Working at landscape scales to achieve efficient public goods provision involves coordination among multiple landowners.  Such coordination is difficult when landowners have private information about their willingness to engage in conservation.  Standard mechanisms such as Pigouvian subsidies fail to achieve an optimal solution with spatially dependent benefits and asymmetric cost information.  We show that an auction mechanism in which landowners submit bids for conservation payments and are paid the contribution of their land to the value of ecosystem services if accepted achieves optimal provision without spatial dependencies and is likely to yield optimal or near optimal solutions with spatially dependent public good.

Thursday, January 12, 3:30 - 5:00 pm, Room 75 Agriculture Hall. Richard Bernsten, AFRE Proferssor Emeritus. "Zimbabwe’s Horticultural Sector: Status & Challenges for Growth”

During 1987-89, Rick served as Co-Director of AFRE's Food Security Research Project in Southern Africa, based at the University of Zimbabwe, Harare. In summer 2011, Rick spent 5 weeks in Zimbabwe as a member of a team that reviewed constraint facing Zimbabwe's horticultural and reforms needed to restore its international competitiveness. In addition, to summarizing the team's research, he will review recent events in Zimbabwe--highlighting the unbelievable changes since the late-1980s.

Wednesday, April 11, 3:30-5:00 pm, Room 75 Agriculture Hall.  Andrew Dillon, Dept. of Ag, Food, & Resource Economics, MSU. “Do Returns to Education Depend on How Labor Questions Are Asked?”

Abstract:This paper investigates whether survey methods matter for estimating returns to education, using a randomized survey experiment. Estimated returns are found to depend on whether using a detailed or short questionnaire, but not on respondent type. Differences are substantial varying from 6 percentage points higher for men to 14 percentage points higher for women when using the short questionnaire, and become insignificant when including a survey-specific selection correction term, indicating different survey design induces distinct selection of subjects into wage work. Results are robust to non-linearity and endogeneity using a control function. The bias shows clear patterns across estimation methods.

Thursday, April 19, 3:30 - 5:00 pm, Room 75 Agriculture Hall. Dean Yang, Associate Professor, Gerald R. Ford School of Public Policy, University of Michigan. "Revising Commitments: Field Evidence on the Adjustment of Prior Choices."

Abstract: The very poor in developing countries often make important intertemporal choices that seem at odds with their individual self-interest. There are many possible reasons why. We investigate several sources via a lab-in-the-field experiment in rural Malawi with large real stakes. We make two key contributions. First, we construct a new dependent variable: later revisions of prior choices regarding the allocation of future income. This allows us to directly examine intertemporal choice revision and its determinants. In particular, this dependent variable permits a novel test for the existence of self-control problems: we find that revisions of money allocations toward the present are positively associated with measures of present-bias from an earlier baseline survey, as well as the (randomly assigned) closeness in time to the first possible date of money disbursement. Second, we investigate other potential determinants of revision, aside from self-control problems. Revisions of money allocations toward the present are positively associated with spousal preferences for such revision, but not with household shocks or the financial sophistication of respondents.

Thursday, April 26, 3:30 - 5:00 pm, Room 75 Agriculture Hall. Per Bylund, Phd candidate, University of Missouri. "Explaining Firm Emergence: Specialization, Transaction Costs, and the Integration Process" Sponsored by the Departments of Economics and Agricultural, Food, and Resource Economics and the Morris Chair in State and Local Government Finance and Policy.

Abstract: This paper aims to explain firm emergence in the market place, and the role of firms in the market structure, using the productive power of specialization. Building on the age-old knowledge about productivity advantages through the division of labor, a theory of firm emergence is drafted in contrast to transaction cost economics. While transaction costs cannot explain the emergence of firms in the market, the specialization perspective provides a promising approach to understanding the firm’s function in the market as well as its internal organization and capabilities. It awards the entrepreneur a central role and suggests a foundational framework for studying the creation of capabilities and the interplay between markets, firms, and entrepreneurs.

Abstract: China recently enacted a comprehensive tax reform in rural areas (the “Tax-for-Fee Reform”), in large part driven by an attempt to address farmers’ complaints about their perception of a heavy tax burden. A crucial but unanswered question is whether this tax reform actually improved farmers’ welfare in rural China. This paper applies several estimation methods, including both cross-sectional propensity score matching and difference-in-difference propensity score matching methods, to village-level survey data from the Chinese Household Income Project in order to examine the causal effect of the recent tax reform in rural China on farmers’ direct and indirect welfare. “Direct” welfare is measured by net income per capita in the village, and “indirect” welfare is proxied by changes in per capita public expenditure composition. We find no evidence that the direct welfare effects of tax reform improved farmer’s net income. In contrast, tax reform appears to have reduced the villages’ financing capacity, and hence to have lowered their overall fiscal expenditures, especially expenditures on local welfare programs such as education, public health, and infrastructure. These indirect effects have had significant and negative impacts on farmers’ welfare. Indeed, our analysis suggests that it is poorer villages that largely undertook these expenditure adjustments, while richer villages experienced no significant changes in these welfare relevant categories. We conclude that tax reform actually lowered overall farmers’ welfare.