Sarah A. Low

Ethanol and the Local Economy

Ethanol has been embraced enthusiastically as a solution to many problems, including national energy security, global warming, air pollution, farm incomes, and local economic development. The industry has boomed in the United States: There were 54 ethanol plants in 2000, 134 by the end of 2007, 171 in mid-September 2008. Estimates of the industrys effects on local economies vary wildly, chiefly because of assumptions regarding the corn industry. This article presents an overview of the industry, its location, and the public policy umbrella that supports its growth. It analyzes what happens to the local economy when a county adds an ethanol plant, demonstrates what must be done to modify input–output models to capture those effects, and applies the approach to proposed plants in four counties. An ethanol plant provides the enticing benefits of a manufacturing plant with 35 to 40 jobs, but several characteristics and uncertainties of the industry merit a careful look when making local economic development decisions.

Employment Risk, Returns, and Entrepreneurship

Comparing local employment portfolios against entrepreneurship, this research finds that local wage and salary job market prospects shape incentives for potential entrepreneurs. Entrepreneurship may thus be more attractive in areas featuring high employment risk and/or low returns. This research contributes to the existing regional employment portfolio literature by using more disaggregated data at both the county and the commuting zone levels. Commuting zones in particular represent a broader spectrum of labor market agglomerations across both rural and urban areas to provide the most stringent and revealing tests of the interrelationship between local employment portfolios and the choice to pursue entrepreneurship. The authors find a U-shaped risk/return trade-off using employment variance and growth, consistent with the literature. They test their hypothesis with a model of regional entrepreneurship, incorporating the employment portfolio variables. This is the first known study to explore the hypothesized relationship between wage and salary employment portfolios and entrepreneurship, effectively synthesizing two previously disparate literatures.

FUELING JOB ENGINES: IMPACTS OF SMALL BUSINESS LOANS ON ESTABLISHMENT BIRTHS IN METROPOLITAN AND NONMETRO COUNTIES

This study examines the effect of small business loans on subsequent establishment births in U.S. counties. Using an economic growth framework and cross-sectional empirical model, we test the hypothesis that the establishment birth rate is higher in counties where the level and annual increase in lending is greater, controlling for community-level characteristics affecting business and economic dynamics. We also consider the long-term effect of small business lending and focus on establishing the appropriate lag structure. The results indicate that small business lending does generally have a positive effect on the employer establishment birth rate that is strongest in nonmetropolitan (rural) counties. (JEL L26, R11, M13)

Measurement and Storytelling in Regional Science

We first review Andy’s lessons to us on the potential contributions of storytelling in regional science. We then review Andy’s lessons on how measurement and definitions affect regional science research by focusing on Andy’s and our own work. We see this research through the lens of measurement and offer our suggestions for what is next.