Adrienne M. Ohler

Will Farmers Trade Profits for Stewardship? Heterogeneous Motivations for Farm Practice Selection

We investigate the trade-off agricultural producers face between profits and stewardly activities when selecting farm practices. Instead of the profit-maximization framework, we model producer behavior in an expanded utility framework, built on production technology, and including two utility components: self and social interests. The framework introduces inherent heterogeneity and social/environmental motivations into farmer behavior. Based on this model, we hypothesize that there are farmers that are willing to forego some profit to engage in stewardly farm practices. With an empirical study, we provide evidence that some farmers are willing to make this sacrifice. Results are consistent with the multi-utility hypothesis. (JEL Q12, Q24)

Factors affecting the rise of renewable energy in the U.S.: Concern over environmental quality or rising unemployment?

This paper studies the development of renewable energy (RE) in the U.S. by examining the capacity to generate electricity from renewable sources. RE capacity exhibits a U-shaped relationship with per capita income, similar to other metrics for environmental quality (EQ). To explain this phenomenon, I consider several of the environmental Kuznets curve theories that describe the relationship between income and environmental quality (Y-EQ), including evolving property rights, increased demand for improved EQ, and changing economic composition. The results fail to provide support for the Y-EQ theories. I further consider the alternative hypothesis that increases in unemployment lead to increases in relative RE capacity, suggesting that promoting RE projects as a potential job creator is one of the main drivers of RE projects. The results imply that lagged unemployment is a significant predictor of relative RE capacity, particularly for states with a large manufacturing share of GDP.

Population Characteristics And Price Dispersion In The Market For Prescription Drugs

We examine the relationship between population characteristics and price dispersion for 75 prescription drugs in five markets. Based on models of price dispersion, we consider that search costs are likely lower for the elderly, who are repeat purchasers. Expected benefits from search are likely higher for low‐income households, who lack insurance. Our results are consistent with the hypothesis that for communities with a large percentage of elderly and poor population, search effort is greater for pharmaceutical drugs, causing lower price dispersion. By understanding the characteristics of who searches for low drug prices, we begin to identify the motives of consumers that might also lead to search for the lowest cost healthcare provider or lowest cost insurance. The results suggest that the Medicare legislation that attempts to close the pharmaceutical doughnut hole may reduce search by the elderly, increase price dispersion, and potentially increase the average price of prescription drugs.

Valuing Public Goods, the Time to Capitalization, and Network Externalities: A Spatial Hedonic Regression Analysis

Valuation studies of public goods, such as a bike trail, typically fail to consider the time to capitalization. Expanding upon previous hedonic housing models, we show that the years since development of the good is an important factor in estimating its value. Using spatial analysis for housing in Bloomington, Illinois, We find the development of a bike trail has an initial negative impact on prices, but over time the value of the trail turns positive, suggesting network effects and information costs impact valuation estimates. Additional analysis finds that networked trail access has a greater impact than nonnetworked trail access. (JEL H41, Q51)