David L. Kay

Role of Services in Regional Economy Growth

Although the final demand-oriented export base paradigm dominates economic development theory and practice, its usefulness is increasingly questioned because of the changing structure of modern economies, empirical critiques of export-led growth strategies, and studies that decompose the actual sources of growth. The importance of service industries, especially local services and their role in inducing economic growth, requires a measure that includes both forward and backward linkages to empirically account for the complete role of an industry. Using data for New York State, we demonstrate how the input-output-based method of hypothetical extraction can more appropriately measure the economic linkage of a broader range of contemporary economic sectors (including services) than traditional, final demand-induced, backward-linkage multipliers. Our analysis provides empirical support for greater economic development attention to be directed toward local services.

Capital Investment and Privatization: Public Opinion on Issues Related to Water and Wastewater Infrastructure

Water and wastewater infrastructure (W&WI) in the U.S. is in need of immediate capital investments. Support from the federal government has declined significantly in the last two decades, forcing state and local governments to contribute a larger share. With increased decentralization of infrastructure decision-making, public opinion is playing an ever greater role. Questions on capital investment, privatization, and concern for W&WI were part of a national omnibus survey conducted in 2012. Demographic variables explained a small part of the variation in responses but were inconsistently significant across the issues, except for party affiliation, which was a significant explanatory variable for all three issues. Stated preferences through public opinion surveys, coupled with revealed preferences, can provide policymakers a broad understanding of public support for various W&WI policy alternatives. An informed electorate and a responsive government can together address complex challenges facing the water and wastewater sector in the country.

Local Government Capacity to Respond to Environmental Change: Insights from Towns in New York State

Local governments attempting to respond to environmental change face an array of challenges. To better understand policy responses and factors influencing local government capacity to respond to environmental change, we studied three environmental issues affecting rural or peri-urban towns in different regions of New York State: climate change in the Adirondacks (n = 63 towns), loss of open space due to residential/commercial development in the Hudson Valley (n = 50), and natural gas development in the Southern Tier (n = 62). Our analysis focused on towns’ progression through three key stages of the environmental policy process (issue awareness and salience, common goals and agenda setting, policy development and implementation) and the factors that affect this progression and overall capacity for environmental governance. We found that—when compared to towns addressing open space development and natural gas development—towns confronted with climate change were at a much earlier stage in the policy process and were generally less likely to display the essential resources, social support, and political legitimacy needed for an effective policy response. Social capital cultivated through collaboration and networking was strongly associated with towns’ policy response across all regions and could help municipalities overcome omnipresent resource constraints. By comparing and contrasting municipal responses to each issue, this study highlights the processes and factors influencing local government capacity to address a range of environmental changes across diverse management contexts.

Disasters, FMD and Food Security: Macroeconomic Responses to Large Scale Disruptions of U.S. Food Production

Without question, it was the 9/11 attacks and subsequent anthrax incidents that sounded the alarm that deliberate contamination of the nation’s food supply is a real possibility. Some foods are more susceptible to deliberate contamination than others, but there is no practical way one can completely eliminate the possibility of being affected. Furthermore, while the psychological implications of an attack on the food supply are sobering, many of the human and economic dimensions of such an event are indistinguishable from those that would occur in the wake of a natural food contamination event. And, not surprisingly, the effects can be significant and wide spread.To contribute to this policy research agenda, we forecast the economic consequences of a major, but hypothetical, event leading to widespread contamination of the food system. For the simulation, we assume that there is an outbreak of foot-and-mouth disease (FMD). Our choice is based primarily on the fact that it would be reasonably easy to transport the disease into the United States, and to disseminate it among feedlots and farms across the country. Since the immediate effect of this disease on the productivity of the livestock sector could also have a potentially disastrous effect on the entire supply chain and U.S. exports of livestock, meat, and dairy products depending upon the extent of the outbreak, and the global response to it, we measure these impacts within the context of a computable general equilibrium (CGE) model of the global economy. The immediate impacts of FMD are modeled as “shocks“ to the outputs of the U.S. livestock, raw milk and other animal products sectors (which includes swine and poultry). These shocks, in turn, result in indirect impacts on all sectors throughout the U. S. economy. There are indirect effects in international markets as well, and these impacts on trade are particularly significant if one assumes that there is a complete ban on exports of livestock, animal products, meat, and dairy products from the United States to all FMD-free regions. In calibrating our initial shocks, we account explicitly for the fact that some primary factors of agricultural production, such as land and capital, are only partially mobile between sectors, particularly in the short run, and perhaps for some specialized resources in the longer run as well. We conduct the empirical analysis using GTAP, a multi-region, multi-sector computable general equilibrium model of the global economy.