ABSTRACT. OUTLOOK SPECIAL SESSION

ABSTRACT. OUTLOOK SPECIAL SESSION

ABSTRACT. OUTLOOK SPECIAL SESSION

ABSTRACT. OUTLOOK SPECIAL SESSION

ABSTRACT. Prior to November 2017, the magnitude of the opioid crisis nationally was estimated to have a cost of nearly 0.33% of GDP. However, the release of the White House report (The Council of Economic Advisers, 2017) on the opioid crisis suggests that indirect costs, not previously considered, increase estimates of the annual cost of the crisis by 597% to an annual cost of $504 Billion or 2.2% annually of GDP (Florence, Zhou, Luo, & Xu, 2016). When those considerations are examined at the individual state level, the “crisis” states (i.e., the states with the worst per capita overdose deaths) experience a cost approaching 15% of Gross State Product. Those additional societal costs reflect the loss in human life from overdoses in addition to the increases in healthcare costs, substance abuse treatments, and the costs to the criminal justice system. The White House report offers only a 20,000-foot view of the societal costs from opioid abuse. Those costs include medical care, substance abuse treatment, workplace costs, criminal justice costs, and opportunity costs from preventable deaths. The estimated cost for the criminal justice system includes an estimated cost of $8 Billion (Florence, Zhou, Luo, & Xu, 2016). However, the foundations for the criminal justice system costs are back-of-the-envelope rough approximations of system-wide costs; they offer little advice at the jurisdictional level to manage scarce resources dealing with the crisis. Not considered in the Council of Economic Advisors estimate of the costs to the criminal justice system are the indirect costs borne by the crime laboratory and ultimately to society as resources are diverted from other uses to the justice system. We use Project FORESIGHT data combined with Census of Publicly Funded Forensic Crime Laboratories data to identify the magnitude of this problem and identify trends with productivity, turnaround time, backlogs, queuing elasticities of demand, and related metrics.

Florence, C., Zhou, C., Luo, F., & Xu, L. (2016). The Economic Burden of Prescription Opioid Overdose, Abuse, and Dependence in the United States, 2013. Medical Care 54(10), 901-906.

The Council of Economic Advisers. (2017, November 22). The Underestimated Cost of the Opioid Crisis. Retrieved from whitehouse.gov: https://www.whitehouse.gov/sites/ whitehouse.gov/files/images/The%20Underestimated%20Cost%20of%20the%20Opioid%20Crisis.pdf.

ABSTRACT. Rural mental health issues, such as high suicide rates among farmers and the growing extent and impact of opioid use in rural areas, have recently received national attention. While research on mental health care accessibility and treatment in rural areas has remained a topic of interest for physicians and other medical professionals, attention by researchers in the social sciences has dwindled since the mid-2000s.

The mental health of rural residents may be affected by availability, accessibility, external forces, and social attitudes. Availability includes the presence of psychologists, who focus on behavioral treatments, and psychiatrists, who are able to prescribe medication, in rural areas. Accessibility indicates a rural resident’s ability to utilize available mental health services and includes transportation and cost, particularly via insurance coverage. External forces are the stressors and opportunities associated with living in a rural areas, particularly economic factors such as job availability and commodity prices. Social attitudes refer to the social and cultural acceptability of receiving mental health treatments.

We perform an exploratory analysis of mental health issues in rural areas at the county level with the goal of identifying areas for further research. We focus on two subpopulations of interest, farmers and veterans, in addition to rural residents as a whole.

ABSTRACT. CUSHING SPECIAL SESSION This study explores the factors that influence the recognition of and stigma towards Prescription Drug Abuse (PDA) and Alcohol Abuse (AA). Using the results of national surveys on each topic combined with county level data, we find that 64% of respondents correctly identify the condition as AA from a vignette style question, while 61% correctly identified the PDA condition. The likelihood of correctly identifying the condition is significantly lower for both PDA and AA if the respondent is younger and greater if older. Males were less likely to correctly identify PDA, while for both PDA and AA, self-identifying as having experienced PDA/AA themselves leads to a lower likelihood of correct identification. There were no significant differences in ability to recognize the conditions across the Census regions, but there was a negative association with county level data on excessive drinking for recognizing AA. Respondents in counties with high levels of mental health service provides were less likely to recognize PDA. With regard to stigma, we focus on the level of agreement or disagreement with the statement that the condition in the vignette is “not a real medical illness’. For both AA and PDA, we find that the biggest factor in determining the likelihood of disagreeing with the statement is correctly identifying the problem in the vignette. This suggests that stigma surrounding these issues can be reduced by increasing literacy with regard to these mental health issues. There were no significant differences in ability to recognize the conditions across the Census regions, but there was a negative association with county level data on excessive drinking for recognizing AA. Respondents in counties with high levels of mental health service provides were less likely to recognize PDA.

ABSTRACT. West Virginia suffers from the worst rate of opioid overdose deaths and opioid prescribing in the nation. Ultimately, this opioid crisis has the potential to be a serious economic development impediment in West Virginia, a state that already ranks among the worst in various health measures such as smoking habits, cancer deaths, obesity, diabetes and economic measures such as poverty, labor participation, and educational attainment. This paper attempts to describe the extent of the opioid crisis in West Virginia, and more importantly estimate the economic costs of the crisis along two fundamental dimensions. First, it considers the costs incurred by West Virginia’s public services system in terms of costs associated with law enforcement, healthcare, and substance abuse treatment. Here it estimates the resources devoted to combating the opioid crisis in West Virginia, which will, in essence, represent resources that could be devoted to improving upon other problems that our state faces, but are instead consumed by the opioid crisis. Second, it considers productivity losses associated with the opioid crisis. Here it takes into account hours that men and women would normally be working and earning income in the state if it were not for opioid abuse.

ABSTRACT. For public officials, property owners and others who are concerned with disaster preparedness, a major challenge is making the existing stock of housing more resilient to future storms. The current lack of resiliency is apparent. Prior to 2017 the National Flood Insurance Program owed about $25 billion to the US Treasury. The hurricanes of 2017 have probably doubled that debt. Besides administering the NFIP, FEMA actively promotes risk mitigation efforts. For example FEMA has published a number of manuals on the six ways that a home can be retrofitted for better flood resiliency through risk mitigation.

Of the six ways, elevating a house above potential flood waters is the most popular. Insurance premiums are set primarily according to the so-called freeboard, i.e. the distance from the house’s Base Flood Elevation (the height of a 100-year flood) and the bottom of the house’s lowest floor. The building code of every community that participates in the NFIP contains the requirement that freeboard cannot be negative. It is possible that the freeboard can be negative and this is most common for older houses. Newer houses also can be out of compliance if a revised Flood Insurance Rating Map has changed the original BFE. Negative freeboard has a dramatic effect on the insurance premium.

Xian, Lin and Kunreuther (2017) have explored the possibility of an optimal elevation with a model that maximizes the savings associated with elevation. They specify a savings equation with the retrofit costs, insurance premium savings and expected life of the house, 30 years. The initial work of freeing it from the foundation is most costly, starting at $30 per square foot, with a low marginal cost for additional elevation. These costs can double or triple if the house has any masonry or the foundation is a concrete slab. They find that the optimal freeboard is usually higher than the FEMA recommendation of one foot.

Their formulation assumes the homeowner has already decided to retrofit the house. However consider the homeowner who is deciding whether or not to elevate. The insurance savings are a significant reduction in ownership cost that potential buyers will recognize. A retrofitted house should have a price premium resulting partly from the capitalized value of future flood insurance savings. Furthermore the house’s appearance will be much different. The premium will be enhanced from a) an improved view of nearby natural amenities, b) more storage area under the house, and c) greater peace of mind from risk reduction.

In this case the homeowner has to also consider the higher resale price. It was estimated using data from Camden County, located on Georgia’s Atlantic coast. The county is characterized by its saltwater marsh environment but there are no beachfront houses. Most of the elevated houses were high enough for parking a car, i.e. about 8 feet. These were compared to similar houses that weren’t elevated.

Similar to the approach employed by Walls, Gerarden, Palmer and Bak (2017) this study used the propensity score hedonic matching method. It is a two-step procedure where the probability of a house being elevated is estimated in a logit model with independent variables related to elevation and the sale price. These variables were house size, age, number of stories, distance to the saltwater marsh, time of sale, flood zone location and whether or not they had a boat dock. In the second step the predicted propensity scores are used in a matching algorithm. The k-nearest neighbor algorithm was used. Estimation using Proc Psmatch in SAS resulted in 151 matched pairs of houses. The weighted average selling price difference between them was $26,220, significant at the 1.1% level, with a standard deviation of $10,220.

A savings equation was evaluated for a typical house with current freeboard heights of minus1 and minus 2 feet. Elevating a house from minus 1 to 8 feet gave savings of $6,000. Going from -2 feet to 8 feet of freeboard reduced the annual premium by $6,750 for savings of $42,000. These results are for houses in the A flood zone. Houses in the V zone face much higher premiums and it usually makes sense to retrofit them. An implication of this study is that research into the optimal elevation height may be moot in some real estate markets. In this one, most elevated houses have 8-feet as a design feature that is currently popular among buyers of coastal housing. For these buyers anything less than 8 feet is suboptimal.

ABSTRACT. The United States has experienced a dramatic increase in unconventional oil and shale gas drilling since the mid-2000s. Although this new technology can be beneficial to the regional economy, potential negative effects (such as underground water contamination) also exist. The aggregate impact of such activity on local housing prices is unclear. Housing prices may benefit from increased local population and income levels; however, the negative externalities from being located too close to a well may lower the price. Several recent studies have examined this issue for house prices in Pennsylvania and other states using hedonic analysis, and have typically uncovered a negative relationship. However, no empirical research on this issue exists for Oklahoma. This paper fills this gap by performing a hedonic housing model for two counties with high levels of drilling activity in Oklahoma. Of particular note is that Oklahoma, with a long history of fossil fuel mining, may have residents who view new energy development activity differently than those in states without this past.

The two counties we examine, Canadian and Payne, are both high-density drilling regions in Oklahoma. Important differences exist, however, since most of the drilling activity in Canadian county taking place more rural areas, while the well sites and residential locations overlap much more in Payne county. Thus, the two counties chosen offer different scenarios for the relationship between the drilling site and housing transactions in Oklahoma. Our dataset comes from the county assessor’s office in each county, and includes over 17,700 housing transactions (Canadian) and 9,700 transactions (Payne) during the period from 2001 to 2016. Incorporating a traditional hedonic pricing framework, our estimation model includes controls for shale well information (such as distance to closest well and number of wells within 1/2/3 miles), physical characteristics of the house (such as age and the number of bedrooms and bathrooms), and distances to the nearest highway and major town. Preliminary results reveal that all estimates accord closely with theoretical expectations in both counties. For instance, more bedrooms (or bathrooms) result in a higher sale price, while the age of the house is negatively related. The results also demonstrate that house price increases with distance to the nearest drilled well, suggesting a negative impact of drilling that is consistent with previous studies. The inclusion of community fixed effects does impact the results somewhat, and only Payne shows a negative impact associated with the number of drilled wells within 2 and 3 miles. The impacts are quantitatively lower than those demonstrated for Pennsylvania and other states, suggesting that Oklahomans may have less sensitivity to unconventional drilling compared to other states.

ABSTRACT. On December 22, 2015, the Nevada Public Utilities Regulatory Commission drastically reduced credit that solar customers could receive for the production of excess energy. This process, known as net metering, effectively reduces the cost of adopting solar power and incentivizes homeowners to install solar panels. Only a year and a half later, under pressure by a struggling solar installer industry and a class-action lawsuit by solar customers, the state passed Assembly Bill 405 which reinstated net metering for residential rooftop solar. Using home sales data from Carson City, Nevada, I exploit these exogenous policy changes to estimate changes in the solar home price premium as they relate to net metering.

ABSTRACT. In this study, we develop a methodology to evaluate the economic impacts in the sightseeing area in Kumamoto and Oita prefectures. The sightseeing area is generally composed by several cities, towns and villages. To evaluate the spatial effects of tourism, we estimate an inter-regional input-output (IRIO) table for municipalities in Kumamoto and Oita prefectures. In 2016, Kumamoto earthquakes attacked these prefectures and the number of visitors has not recovered yet. Based on the number of people to stay in each region, we evaluate the economic impacts of local tourism in the cross-border regions before and after the earthquake. The intra-regional effects and inter-regional spillover effects of the earthquake are shown at regional level.

ABSTRACT. b. Who shall inherit my ‘castle’? Establishing value of regional heritage cultural assets

Sussan, F. University of Phoenix, Akita International University Chinta, R. Nova Southeastern University

As public funding is limited to finance smaller-scaled heritage cultural assets, it is imperative for private owners to establish future value of their cultural assets. One such example is the historical merchant houses (Kura) in the Tohoku region, Japan. These historical houses are situated in locations that face depopulation problem and a general lack of succession planning. As most off-springs have migrated to cities where they find economic prosperity, they are unwilling to relocate to their ancestral houses with limited economic opportunities. The vacuum of succession thus has become a potential burden for taxpayers as many owners may decide to donate their ancestral houses to the local government. Answering this crisis both homeowners and local governments face, this paper introduces three methods of asset evaluation commonly used in Mergers and Acquisition (M&A) – future net positive cash flow, replacement value of asset, and peer asset evaluation. We further discuss about the various choices or combination of choices to establish value for these historical merchant houses. We conclude with a recommendation of establishing a private heritage cultural fund that will benefit the owners and at the same time solve regional policy problems.

ABSTRACT. We study two probabilistic approaches to cleaning the Ganges river when the underlying goal is to use the cleanup to sustain tourism in Varanasi, India. The first approach models the idea that because resources are scarce and cleanup is costly, not all pollutants in the Ganges can be removed. Therefore, a cleaning agency first establishes a benefit-cost ratio rule and then it uses this rule to remove from the Ganges only those pollutants whose removal satisfies the ratio rule. In contrast, the second approach focuses on removing all pollutants from the Ganges but the emphasis now is on the frequency of cleanup given that pollutants accumulate temporally and hence water quality deteriorates over time. Finally, we compare and contrast these two approaches and discuss the connections between the two approaches and the sustainability of tourism in Varanasi.

ABSTRACT. It is known by now that heritage cultural sites have been used as tourist destinations for regional economic development. This is especially important for local communities that face depopulation and with less economic endowment.  In theory, these cultural assets are considered as public goods which are generally maintained through public funding. In practice, even though some heritage cultural sites collect small admission fees, these fees contribute little to the cost of preservation.  The consumption on gifts, meals and accommodation by tourists or visitors contribute to local businesses, but the tax revenue generated by these was minimal to let alone fund the operation and maintenance of these cultural sites.  As tourists and visitors enjoy these heritage cultural icons, are they willing to pay to preserve these sites beyond admission fees? In this study, we explore such possibilities by asking tourists and visitors their willingness to pay to preserve these heritage cultural sites.  We use the contingent valuation method and asked more than 1,000 visitors in the historic district of Kakunodate Bukeyashiki (Samurai houses) in Tohoku area, Japan. Our results suggest that local resident visitors, who are already funding these sites through local taxes, have a significantly higher willingness-to-pay (median of 3,132 yen) than non-resident visitors (median of 2,446 yen) for preserving the Samurai houses.