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Behind-the-counter, but Over-the-border? The Assessment of the Spillover Effect of Increased Availability of Emergency Contraception in Washington on Neighboring States
Emergency contraception (EC), that gained FDA’s approval in the late 1990s as a prescription medicine, may effectively prevent unwanted pregnancy if taken promptly after an unprotected sexual intercourse. Because EC efficacy is inversely related to the duration between intercourse and the time it is taken, the prescription requirements can make it less effective. Washington was the first state to loosen up the prescription requirements making EC available behind-the-counter at pharmacies to women of any age in 1998. I hypothesize that the increased availability of EC affects fertility rates beyond the borders of the state that allows it. Using the difference-in-difference methodology and 1991-2005 county level data, I find that increased access to EC is associated with a substantial and statistically significant 5-7% decrease in abortion rates and 2% decrease in pregnancy rates in Washington counties that had access to EC without a prescription within 10 miles. As expected, the effect becomes numerically smaller and statistically weaker with an increase in travel distance. I find some evidence in support of the spillover effects in Idaho, but not Oregon. After accounting for changes in the availability of abortion services, the decrease in fertility rates in “treated” Idaho counties is rather small and models lack sufficient power to detect it.
The Economic Impact of the University of Hawai'i System
The University of Hawai‘i (UH) generates economic activity through its purchases from local businesses, its payment to its employees, and spending by students and visitors. This report estimates UH’s total economic activity in the state of Hawai‘i in fiscal year 2012. Following a standard approach, we define economic impact to be the direct, indirect, and induced economic activities generated by the university’s spending in the state economy.
Forecasting with Mixed Frequency Samples: The Case of Common Trends
We analyze the forecasting performance of small mixed frequency factor models when the observed variables share stochastic trends. The indicators are observed at various frequencies and are tied together by cointegration so that valuable high frequency information is passed to low frequency series through the common factors. Di fferencing the data breaks the cointegrating link among the series and some of the signal leaks out to the idiosyncratic components, which do not contribute to the transfer of information among indicators. We fi nd that allowing for common trends improves forecasting performance over a stationary factor model based on di erenced data. The common-trends factor model" outperforms the stationary factor model at all analyzed forecast horizons. Our results demonstrate that when mixed frequency variables are cointegrated, modeling common stochastic trends improves forecasts.
Potential Benefits, Impacts, and Public Opinion of Seawater Air Conditioning in Waikïkï
This report provides a summary of an investigation by the University of Hawai‘i Sea Grant College Program into the viability and effectiveness of installing a seawater air conditioning district cooling system in Waikīkī. Seawater air conditioning (SWAC) harnesses the cooling properties of cold seawater to provide cool air for air conditioning purposes. In doing so, SWAC reduces the amount of electricity needed for air conditioning. SWAC is particularly relevant to Hawai‘i for two reasons: first, the proximity of deep, cold, ocean water to areas of high population make Hawai‘i an obvious location for implementing the technology; and secondly, with approximately 90% of its electricity generated from fossil fuels, Hawai‘i is the most fossil fuel dependent state in the nation. Unlike the rest of the U.S., where coal, natural gas, and nuclear power are called upon to meet a substantial proportion of the electricity demand, Hawai‘i relies heavily on residual fuel oil (the by-product of refining crude oil for jet fuel, gasoline, and other distillates). As a result, Hawai‘i has very high electricity prices compared to the rest of the country. SWAC has the potential to both cut the cost of air conditioning and reduce the amount of harmful emissions that are released as a by-product of generating electricity from fossil fuels.
Seawater air conditioning works by pumping cold (44-45°F), deep (1,600-1,800 feet) seawater into a cooling station (Figure 1). Here, the cold seawater is used to chill fresh water flowing in nearby pipes. The chilled fresh water is then piped into hotels for cooling purposes while the seawater (slightly warmed to 53-58°F) is pumped back into the ocean at a shallower depth (120-150 feet).
Hawaii Construction Forecast: Construction Upswing Picks Up Speed
Construction turned the corner in Hawaii last year after five straight years of contraction. We are now seeing impressive gains in percentage terms for private building permits, although these are starting from very depressed levels. Home building, retail and visitor industry upgrades, the ongoing boom in photovoltaic installation, and, yes, rail, will combine to drive a strong industry expansion over the next several years.
A summary of this forecast is available as a service to the public. For more detailed analysis, subscribe to UHERO's Forecast Project.
Sustainable Development and the Hawaii Clean Energy Initiative: An Economic Assessment
The connection between the emerging field of sustainability science and the economics of sustainable development has motivated a line of interdisciplinary research inspired by the notion of “positive sustainability.” This notion is founded on three principles or pillars: (1) adopting a complex systems approach to modeling and analysis, integrating natural resource systems, the environment, and the economy; (2) pursuing dynamic efficiency, that is, efficiency over both time and space in the management of the resource-environment-economy complex to maximize intertemporal well-being; and (3) enhancing stewardship for the future through intertemporal equity, which is increasingly represented as intergenerational neutrality or impartiality. This paper argues that the Hawaii Clean Energy Initiative (HCEI) fails to satisfy all three pillars of sustainability, and consequently fails to achieve the "sustainability criterion" put forward by Arrow, Dagupta, Daily et al: that total welfare of all future generations not be diminished. HCEI shrinks the economy, contributes negligibly to reduction of global carbon emissions, and sparks rent seeking activity (pursuit of special privilege and benefits) throughout the State of Hawaii.
Common correlated effects and international risk sharing
International risk sharing has been among the most actively researched areas of macroeconomic for the last two decades. Empirical contributions in this field make extensive use of so called "consumption insurance" tests evaluating the extent to which idiosyncratic shocks in income get transferred to consumption. A prerequisite of such a test is the isolation of country specific variation in the data. We show that the cross-sectional demeaning technique frequently used in the literature is in general inadequate to eliminate global factors from a panel data set, and can lead to misleading inference. We argue that international risk sharing tests should instead be based on a method that more reliably deals with global factors. We claim and illustrate in our empirical application that the fairly simple common correlated eects estimator for cross-sectionally dependent panels introduced by Pesaran (2006), and Kapetanios et al. (2010) is a tool that satisfies this requirement.
Hawaii Economists Consider Impact Of Minimum Wage Increase
Two proposed bills in the legislation have the support of Governor Abercrombie, and could bump up Hawaii current minimum wage to $8.75 an hour. HPR's Molly Solomon reports on the potential impacts.
Brief: Should we increase Hawaii's minimum wage?
A higher minimum wage is unlikely to accomplish the stated goal of raising the living standards of the working poor. And given Hawaii’s highly service oriented economy, the negative impact of an increased minimum wage may have a larger impact than in other states.
Carl Bonham Discusses Latest State Forecast Update on The Conversation
UHERO Executive Director and Professor of Economics Carl Bonham goes on The Conversation on HPR to talk about the latest State Forecast Update, including discussion regarding current and forecasted federal spending cuts, construction jobs, and the future of tourism.
Estimating Demand Elasticities in Non-Stationary Panels: The Case of Hawai‘i’s Tourism Industry
Tourism demand elasticities are central to marketing, forecasting and policy work, but the wide array of occasionally counterintuitive estimates produced by existing empirical studies implies that some of those results may be inaccurate. To improve the precision of estimates, it is natural to turn to the richness of panel data. However, panel estimation using non-stationary data requires careful attention to the likely presence of common shocks shared across the underlying macroeconomic variables and across regions. Several recently developed econometric tools for panel data analysis attempt to deal with such cross-sectional dependence. Apply the estimator of Pesaran (2006) and Kapetinos, Pesaran and Tamagata (2010) to obtain tourism demand elasticities in non-stationary heterogeneous dynamic panels subject to common factors. We study the extent to which tourism arrivals from the US Mainland to Hawaii are driven by fundamentals such as real personal income and the cost of the trip, and we find that neglecting cross-sectional dependence in the data leads to spurious results.
UHERO State Forecast Update: Expansion Shifts Into Higher Gear
2012 marked a transition to healthier growth. Room for rapid tourism gains is now limited, but other sectors will pick up the pace.
A summary of this forecast is available as a service to the public. For more detailed analysis, subscribe to UHERO's Forecast Project.
Tax Credit Incentives for Residential Solar Photovoltaic in Hawai‘i
Solar photovoltaic (PV) tax credits are at the center of a public debate in Hawai‘i. The controversy stems largely from unforeseen budgetary impacts, driven in part by the difference between the legislative intent and implementation of the PV tax credits. HRS 235-12.5 allows individual and corporate taxpayers to claim a 35% tax credit against Hawaii state individual or corporate net income tax for eligible renewable energy technology, including PV. The policy imposes a $5,000 cap per system, and excess credit amounts can be carried forward to future tax years. Because the law did not clearly define what constitutes a system or restrict the number of systems per roof, homeowners have claimed tax credits for multiple systems on a single property. In an attempt to address this issue, in November 2012, temporary administrative rules define a PV system as an installation with output capacity of at least 5 kW for a single-family residential property. The new rule does not constrain the total number of systems per roof, but rather defines system size and permits tax credits for no more than one sub-5 kW system. In other words, it is possible to install multiple 5 kW systems and claim credits capped at $5,000 for each system. There is an additional 30% tax credit for PV capital costs at the federal level. There is no cap for the federal tax credit and excess credits can be rolled over to subsequent years.
The Impact of Same-Sex Marriage on Hawai‘i’s Economy and Government
This report provides quantitative and qualitative measures of the impact of same-sex marriage on Hawai`i’s economy and government. We find that marriage equality is likely to lead to substantial increases in visitor arrivals, visitor spending, and state and county general excise tax revenues. We estimate that fewer than 100 spouses will be added as beneficiaries to public and private employer-provided health insurance plans. The size of the gains from marriage equality depends critically on upcoming rulings by the U.S. Supreme Court on the constitutionality of California’s Proposition 8 and the Defense of Marriage Act.
Carl Bonham on Insights on PBS Hawaii: Fiscal Cliff
UHERO Executive Director and Professor of Economics Carl Bonham goes on Insights on PBS Hawaii with host Dan Boylan and other guests. The group discusses the impacts of the federal "fiscal cliff" on Hawai'i's economy, as well as the state's plans to address government spending and encourage revenue growth.