Malcolm Getz

Consumer Revealed Preference for Environmental Goods

AS consumers choose among cities, they may trade off higher earnings against differences in the consumption of environmental goods. Commuter travel time, crime and air quality, the quality of educational and health facilities, each may involve unpurchased environmental goods. Decisions about -the consumption of such goods are made simultaneously with the choice of city of residence. By examining the compensating earnings differentials relative to differences in environmental goods across cities, one can estimate hedonic prices for each environmental attribute. The hedonic prices may be useful in valuing the benefit of environmental improvement, and as weights in constructing an index of the quality of life, as Tobin and Nordhaus (1972) propose. By relating the index of the quality of life to city size, something may be learned about the effect of urban growth on the quality of life. This method is a substantial improvement over the index of Liu (1975). Previous efforts to estimate these hedonic prices by Izraeli (1974) and by Hoch and Drake (1974) have been unsatisfying for several reasons. First, they model only the consumer side, while ignoring the possibility that differences in productivity may influence wage determination. Thus, they do not indicate the conditions necessary for their equations to be identified. Second, they do not include variables representative of a wide range of environmental attributes. Exclusion of important categories of environmental attributes may unduly bias the estimates. Hoch and Drake (1974), for example, focus on climate while ignoring many other environmental attributes. Third, if one includes a wide array of environmental attributes, one is confronted with a serious multicollinearity problem. Kelley (1977) takes explicit account of the demand side of the labor market in estimating hedonic prices for amenities. His analysis, however, does not account for differences in the cost of living in different cities, apparently assuming that all goods are traded in national markets. In addition, Kelley does not account for differences in labor force quality in different cities. This essay considers the production activity of cities in identifying the supply of labor. A rich set of environmental attributes is then used to develop new estimates of the hedonic prices for urban amenities.

Estimating economies of scale in higher education

Abstract If colleges and universities periodically operate at unexpected enrollment levels, measured costs may reflect short-run rather than long-run minimum average costs for different levels of output. If there is a systematic relationship between operating at disequilibrium and institutional size, cross-sectional estimates of the degree and level of scale economies may be biased. Using data from 1987-88, we assess the importance of the equilibrium assumption for estimates of scale economies in higher education.

Adoption of Innovations in Higher Education

An original survey of 238 colleges and universities in the United States identifies the date of adoption of 30 innovations in curriculum, classrooms, student life, libraries, computing, and finances. On average, about 26 years elapse from adoption by the first percentile institution to adoption by the median institution. Library and computing innovations are adopted twice as fast as curriculum and classroom innovations. Financial innovations are adopted most slowly. Hazard models for the timing of adoption of the innovations identify attributes of institutions that tend to adopt particular innovations earlier.

The local economic impact of state parks.

Data from interviews at five Tennessee state parks are combined with information from park records and the U.S. Census to analyze local employment and expenditure impacts of state park development....

Open-Access Scholarly Publishing in Economic Perspective

Abstract What is the prospect for migrating scholarly journals from paper to digital formats in a way that lowers university expenditures? Although many journals are published digitally, at least so far, the digital format complements paper, increasing university expenditures. Open-access publications that are free to readers and financed by publication fees paid by authors and their agents may both lower costs and allow scholarship to reach a larger audience. However, gains to universities may depend on open-access being quality-assured and controlled by not-for-profit publishers. Potential savings for a typical U.S. research library might be on the order of

A model of the impact of transportation investment on land rents

2.3 million per year even as the same level of effort goes to reviewing and editing published articles as at present. To launch the initiative, provosts might adopt policies to support publication fees and not-for-profit publishers might invest in start up funds for editing and marketing open-access journals.

College Sports: The Mystery of the Zero-Sum Game

Abstract A monocentric model of urban space with production and residential areas identified is exercised to indicate the possible impacts of transportation investments on land rents. The price elasticity of demand for outputs and the elasticity of the supply of inputs to the urban area are important determinates of the level of rents. The model is useful for identifying the distributional consequences of transportation investments, and has the potential of being used to identify optimal financing schemes.

Education and earnings in the health professions.

Change • January/February 2012 Malcolm Getz (malcolm.getz@vanderbilt.edu) is an associate professor of economics at Vanderbilt University, where he has also been director of the Jean and Alexander Heard Library (1984–94) and associate provost for information services and technology (1985-94). His most recent book is Investing in College: A Guide for the Perplexed. John Siegfried (john.siegfried@vanderbilt.edu) is professor of economics emeritus at Vanderbilt University, a research fellow at the University of Adelaide, South Australia, and secretary-treasurer of the American Economic Association. He has also been president of the Southern and Midwest Economics Associations. His research concerns antitrust economics, the economics of sports, and the economics of higher education. This is a condensed version of an essay by the same authors published in The Oxford Handbook of Sports Economics, edited by Leo Kahane and Stephen Schmanske (Oxford University Press, 2012). Documentation and references can be found in the original. The authors thank Charles Clotfelter, Brad Humphreys, Leo Kahane, Kevin Quinn, Stephen Schmanske, Peter Sloane, and Andrew Zimbalist for helpful comments on an early draft. COLLEGE SPORTS

Comment: "Benefit Incidence Methodology for Mixed Goods," By James M. Dean

The Recognition Lecture is an annual honor awarded by the Association of American Veterinary Colleges (AAVMC) to an individual whose leadership and vision have made significant contributions to academic veterinary medicine and the veterinary profession. In 2012, this prestigious honor was bestowed upon Dr. Malcolm Getz, who has advanced the understanding of the economics of academic veterinary medical higher education and the private practice veterinary profession. Dr. Getz is an associate professor of economics in the department of economics at Vanderbilt University. He has been a faculty member in economics at Vanderbilt since 1973. He was Director of the Jean and Alexander Heard Library (1984–1994) and Associate Provost for Information Services and Technology (1985–1994). An accomplished writer, he has authored four monographs, two textbooks, and many essays. He earned his BA in economics from Williams College in 1967 and his PhD in economics from Yale University in 1973. In his lecture to attendees of the AAVMC Annual Meeting in March of 2012, Dr. Getz discussed the relationship between education and earnings across health professions. Dr. Getz has reviewed the economics of several different health science professions including medicine, dentistry, nursing, and physician assistants, as well as veterinary medicine. His breadth of understanding the strengths, weaknesses, and trends of these different professions provides insights into the future and subsequent modifications that will take place to sustain the benefits each profession offers to society at a reasonable cost. All health professions are facing challenges, economic and otherwise. By reviewing these challenges, the veterinary profession can avoid circumstances that are not economically viable for society to bear. Dr. Getz makes intriguing arguments for modification of educational programs, resulting in lower educational costs while still meeting the needs of society. —Bennie Osburn, DVM, PhD, DACVP, DAAVI, DAVES (hon.), Former Interim Executive Director, AAVMC; Dean Emeritus, School of Veterinary Medicine, University of California, Davis

Paradigm shifts in enginering education: The influence of computers and communications

How much confidence should be placed in the &dquo;benefit ~~&dquo; incidence methodology&dquo; (Dean, 1980)? The method involves a very abstract characterization of public services such that individual services are represented simply by different values of three parameters. The emprical estimates on which the method relies use expenditure data unmodified for variations in input prices or efficiency. The discussion appeals to the median voter rule when the median resident normally stays home during municipal elections. The potential interdependence of public and private expenditures is ignored. Dean carefully distinguishes between a benefit incidence analysis and an expenditure analysis. Yet the conclusions of the essay are presented in a way that suggests the redistributional potential of local government tax and expenditure programs. In fact, as Dean recognizes, impor-