Products: Research Papers
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How Hawaii’s State Government Shares Transient Accommodation Tax Revenues With Its Local Governments
Many states in the U.S. give unrestricted financial support to their local governments. The reasons some state governments provide aid and others do not, and why a particular mode of revenue sharing is adopted remain unclear. This paper examines Hawaii’s recent effort at developing a model to allocate the state’s transient accommodation tax revenues between the State and the county governments. The paper documents the process and explains the rationale behind the model.
Filipino 2040: Environmental Resources, Shocks, and National Well-Being
The contribution of the environmental-resource sector to national well-being is the sum of natural resource depletion and environmental degradation. Inasmuch as existing resource stocks are below efficient levels, better enforcement of existing laws as well as policies that incentivize sustainable use are needed. Similarly, progressive royalty assessment of mineral resources can incentivize exploration without transferring the bulk of resource rents to private interests. In the case of pollution, the key is to face firms with the full costs of their production, e.g. through emission taxes and/or cap and trade systems. Calculating total depletion and degradation (TDD) will facilitate the calculation of green national income (GNI), a more inclusive metric of national well-being. In the same way, simultaneous optimization of disaster management policies in the face of climate change can facilitate a further improvement in national well-being, this time measured as comprehensive national income (CNI).
Cost-Benefit Analysis of Disaster Mitigation Infrastructure: The Case of Seawalls in Otsuchi, Japan
Disaster management problems often pose the same types of challenges that environmental governance problems do; they involve decision-makers at various levels and can transcend political boundaries. We conduct a benefit-cost analysis of a disaster adaptation strategy in Otsuchi, which was undertaken shortly after the 2011 Tohoku earthquake and tsunami devastated the region. Results indicate that present value net benefits from the planned seawall are positive, even if expected damages are low, provided that the wall is capable of reducing damage by at least 50%. A hybrid method of governance may, however, be effective at increasing the benefit-cost ratio.
Sustainable Agriculture Irrigation Management: The Water-Energy-Food Nexus in Pajaro Valley, California
The water-energy-food (WEF) nexus is quickly becoming one of the most critical global environmental challenges of the twenty first century. However, WEF systems are inherently complex; they typically are dynamic and span multiple land or agro-ecosystems at a regional or global scale. Addressing this challenge requires a systems approach to optimal and sustainable resource management across multiple dimensions. To that end, using Pajaro Valley (California) as a case study, our research aims to (1) highlight synergies and tradeoffs in food and water production, (2) build a dynamic framework capable of examining intertemporal resource relationships, and (3) detail the steps required to develop incentive-compatible financing of the resulting management plans when benefits are not distributed uniformly across users. Using a stylized model, we find that in the long run, inland growers benefit from the halting of seawater intrusion (SWI) due to overpumping of groundwater. We also calculate that the water provided by the proposed College Lake Multi-Objective Management Program—a plan designed to halt SWI and support sustainable water and agricultural development in the region—will generate net revenue of $40-58 million per year, compared to an annualized cost of less than $3 million. An equal cost-sharing plan would be desirable if the benefit of the project exceeded $1,268 per year for each well owner. Since this may not necessarily be the case for smaller well owners, one possible alternative is to allocate costs in proportion to expected benefits for each user.
A Review of the Current State of Research on the Water, Energy, and Food Nexus
The idea of the water-energy-food nexus was launched in earnest since at least the Bonn2011 Nexus Conference, when the German Federal Government organized the international Conference “The Water Energy and Food Security Nexus – Solutions for the Green Economy” to contribute to the United Nations Conference on Sustainable Development (Rio+20). According to the background paper prepared by Hoff for the Conference, the concept of the water-energy-food nexus emerged in the international community in response to climate change and social changes including population growth, globalization, economic growth, and urbanization (Hoff 2011). These issues are causing increased pressure on water, energy and food resources, presenting communities with an increasing number of tradeoffs and potential conflicts among these resources which have complex interactions. For example, demands for water, energy and food are estimated to increase by 40%, 50% and 35% respectively by 2030 (US NIC 2012). Although various nexus-related conferences, research initiatives and projects have been held around the world under such circumstances, water-energy-food nexus policy has not yet been initiated in Japan.
The Economic Value of Groundwater in Obama
Worldwide, freshwater is important not only for direct consumption but also for its role in the production of a variety of goods and services. For example, water is used for cooling nuclear reactors and as an input for the production of energy via hydroelectric processes. Freshwater also is essential for the production of food, including crops and livestock. Recognizing these synergies and identifying tradeoffs are key components of water-energy-food (WEF) nexus research (Taniguchi et al., 2013; Loring et al., 2013; Giampietro et al., 2014). In this study, we focus on Obama City, Japan, where groundwater is used directly for domestic and commercial consumption and for melting snow. Stored groundwater also provides an indirect benefit: submarine groundwater discharge (SGD) from the aquifer supports the nearshore ecology, including a locally important fishery. Using this case study, we document some common challenges that arise when undertaking WEF research and outline an example of an integrated approach that combines multiple modes of analysis to overcome those obstacles.
Creating Tourism Improvement Districts to Raise Stable Funding for Destination Marketing and Promotion
Tourism Improvement Districts (TIDs), modeled after the more well-known Business Improvement Districts (BIDs), are increasing rapidly in the U.S. With enabling legislation from state and local governments, TIDs allow hoteliers in a tourist destination to ban together to impose compulsory assessments on nearly all the hotels in the district in order to raise money to fund destination marketing. To date, research on TIDs have come almost exclusively from destination marketing organizations (DMOs), travel associations, TIDs, and consultants with vested interest in the formation and expansion of TIDs. This paper synthesizes information from available reports and attempts to provide a more balanced view of the role of TIDs in destination tourism marketing and promotion.
The Evolution of the HI Growth Initiative
Supporting innovation as an engine of economic growth is an essential component of the state’s overall economic strategy. The Hawaii Department of Business, Economic Development and Tourism and its attached agencies, the Hawaii Strategic Development Corporation (HSDC), the High Technology Development Corporation (HTDC), and the Natural Energy Laboratory of Hawaii Authority (NELHA) are responsible for advancing innovation-oriented projects that improve the living standards of Hawaii residents by generating opportunities for high-wage job creation.
Recent Trends in Hawaii's Green Economy: Agriculture, Energy and Natural Resource Management
This report provides an update to the 2012 “Foundations for Hawai‘i’s Green Economy: Economic Trends in Hawai‘i Agriculture, Energy, and Natural Resource Management.” Although economic information has long been collected for many sectors in Hawai‘i, including agriculture and energy, the 2012 project was the first to collect indicators specifically for the natural resource management (NRM) sector. With financial support from Hau‘oli Mau Loa Foundation and research assistance from The Nature Conservancy, the University of Hawai‘i Economic Research Organization was tasked with collecting and analyzing information from three sectors that are key to future sustainability in Hawai‘i - energy, agriculture and natural resource management.
New Perspectives on Land and Housing Markets in Hawaii
Land leasing is common in Honolulu, with many owners of residential, industrial, and commercial buildings leasing land. This report examines land and housing markets in Honolulu and the mainland United States to understand better why prices and lease rents are so much higher in Honolulu than most other US cities. Three stylized facts stand out:
- Census data show that Hawaii home prices were already exceptionally high in 1950.
- Over the last six decades, inflation-adjusted land and housing prices in Honolulu register small annual real increases.
- Honolulu’s inflation-adjusted land and housing prices have been highly volatile in the medium term since the 1960s, forcing market participants to bear high levels of risk.
Making an Optimal Plan for 100% Renewable Power in Hawaii
The State of Hawaii has adopted the unprecedented goal of building a 100 percent renewable power system by 2045. This report identifies some of the central challenges in achieving this goal and uses the SWITCH power system planning model to identify solutions to these challenges. A 100% renewable power system must balance electricity supply and demand on two main time scales: diurnal (providing enough power each hour of the day) and seasonal (providing enough total energy on each day of the year). The diurnal balance could be achieved by installing large amounts of primarily solar production capacity, then using batteries, demand response, biofuels or hydrogen production to shift power production and/or consumption between day and night. The seasonal balance may be more challenging. Energy demand during days or weeks with low sunlight could be met by building extra solar and wind capacity, using biofuels, or using hydrogen produced during sunny months. Demand response will likely be less expensive than the other options for day-night energy balancing, and customer-sited solar may be competitive with utility-scale solar; consequently electric utilities may need to become energy integrators and market managers, rather than bulk power providers.It is unclear how much biofuel the State could use without compromising other environmental and energy independence objectives; consequently hydrogen energy storage merits serious consideration. SWITCH or similar models can be used to identify optimal long-term plans; however, a new incentive system is needed to encourage the State's utilities to develop and implement such plans, regardless of who will own the generating equipment.
Methods of the Water-Energy-Food Nexus
This paper focuses on a collection of methods that can be used to analyze the water-energy-food (WEF) nexus. We classify these methods as qualitative or quantitative for interdisciplinary and transdisciplinary research approaches. The methods for interdisciplinary research approaches can be used to unify a collection of related variables, visualize the research problem, evaluate the issue, and simulate the system of interest. Qualitative methods are generally used to describe the nexus in the region of interest, and include primary research methods such as Questionnaire Surveys, as well as secondary research methods such as Ontology Engineering and Integrated Maps. Quantitative methods for examining the nexus include Physical Models, Benefit-Cost Analysis (BCA), Integrated Indices, and Optimization Management Models. The authors discuss each of these methods in the following sections, along with accompanying case studies from research sites in Japan and the Philippines. Although the case studies are specific to two regions, these methods could be applicable to other areas, with appropriate calibration.
Nowcasting Tourism Industry Performance Using High Frequency Covariates
We evaluate the short term forecasting performance of methods that systematically incorporate high frequency information via covariates. Our results indicate that including timely intra-period data into the forecasting process results in significant gains in predictive accuracy compared to relying exclusively on low frequency aggregates. Anticipating growing popularity of these tools among empirical analysts, we offer practical implementation guidelines to facilitate their adoption.
Facebook-to-Facebook: Online Communication and Economic Cooperation
Communication is often critical for economic cooperation and enhancement of trust. Traditionally, direct face-to-face communication has been found to be more effective than any form of indirect, mediated communication. We study whether this is still the case given that many people routinely use texting and online social media to conduct economic transactions. In our laboratory experiment, groups of participants communicate either (i) face-to-face, (ii) through the most popular online social network - Facebook, or (iii) using text messaging, before participating in a public goods or a trust game. While people talk significantly more under traditional face-to-face, discussions through Facebook and text messages prove as effective as face-to-face communication in enhancing cooperation and increasing trust. For all three media, discussions that focus on the game or use more positive emotion words are correlated with enhanced trust. It appears that young American adults are now just as adept at communicating and reducing social distance online as they are in person.
Where do Social Preferences Come From?
Where do preferences for fairness come from? We use a unique field setting to test for a spillover of sharing norms from the workplace to a laboratory experiment. Fishermen working in teams receive random income shocks (catching fish) that they must regularly divide among themselves. We demonstrate a clear correlation between sharing norms in the field and sharing norms in the lab. Furthermore, the spillover effect is stronger for fishermen who have been exposed to a sharing norm for longer, suggesting that our findings are not driven by selection effects. Our results are consistent with the hypothesis that work environments shape social preferences.