Agricultural Economics & Economics

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Situated jointly within MSU's College of Agriculture and College of Letters and Sciences, our department offers a unique opportunity for students with diverse interests to learn skills in critical analysis, logical problem solving, data and policy analysis, written and oral communication, business management. We train individuals who will make a big difference in the world by applying solid critical thinking skills. Our award-winning faculty has expertise in a wide variety of fields. We conduct cutting-edge research and teach a myriad of courses.

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Correlation of the Ratio of Metastatc to Non-Metastatic Cancer Cases With the Degree of Socioeconomic Deprivation Among Texas Counties
(2011-02) Phillips, Billy U. Jr.; Gong, Gordon; Hargrave, Kristopher A.; Belasco, Eric J.; Lyford, Conrad P.
Background: Previous studies have demonstrated that cancer registrations and hospital discharge rate are closely correlated with census data-based socioeconomic deprivation indices. We hypothesized that communities with higher degrees of socioeconomic deprivation tend to have a higher ratio of metastatic to non-metastatic cancer cases (lung, breast, prostate, female genital system, colorectal cancers or all types of cancers combined). In this study, we investigate the potential link between this ratio and the Wellbeing Index (WI) among Texas counties. Results: Cancer data in 2000 were provided by the Texas Cancer Registry, while data on the ten socioeconomic variables among the 254 Texas counties in 2000 for building the WI were obtained from U.S. Census Bureau. The ten socioeconomic status variables were subjected to the principal component analysis, and the first principal component scores were grouped into deciles for the WI (1 to 10) and the 254 Texas counties were classified into 10 corresponding groups. Weighted linear regression analyses and a Cochran-Armitage trend test were performed to determine the relationship between the ratio of age-adjusted metastatic to non-metastatic cancer incidence cases and WI. The ratios of metastatic to non-metastatic cases of female genital system cancer (r2 = 0.84, p = 0.0002), all-type cancers (r2= 0.73, p = 0.0017) and lung cancer (r2= 0.54, p = 0.0156) at diagnosis were positively correlated with WI. Conclusions: The ratios of metastatic to non-metastatic cases of all-type, female genital system and lung cancers at diagnosis were statistically correlated with socioeconomic deprivation. Potential mediators for the correlation warrant further investigation in order to reduce health disparities associated with socioeconomic inequality.
The Chronic Kidney Disease Model: A General Purpose Model of Disease Progression and Treatment.
(2011-06) Orlando, L. A.; Belasco, Eric J.; Patel, U. D.; Matcher, D. B.
Background: Chronic kidney disease (CKD) is the focus of recent national policy efforts; however, decision makers must account for multiple therapeutic options, comorbidities and complications. The objective of the Chronic Kidney Disease model is to provide guidance to decision makers. We describe this model and give an example of how it can inform clinical and policy decisions. Methods: Monte Carlo simulation of CKD natural history and treatment. Health states include myocardial infarction, stroke with and without disability, congestive heart failure, CKD stages 1-5, bone disease, dialysis, transplant and death. Each cycle is 1 month. Projections account for race, age, gender, diabetes, proteinuria, hypertension, cardiac disease, and CKD stage. Treatment strategies include hypertension control, diabetes control, use of HMG-CoA reductase inhibitors, use of angiotensin converting enzyme inhibitors, nephrology specialty care, CKD screening, and a combination of these. The model architecture is flexible permitting updates as new data become available. The primary outcome is quality adjusted life years (QALYs). Secondary outcomes include health state events and CKD progression rate. Results: The model was validated for GFR change/year -3.0 ± 1.9 vs. -1.7 ± 3.4 (in the AASK trial), and annual myocardial infarction and mortality rates 3.6 ± 0.9% and 1.6 ± 0.5% vs. 4.4% and 1.6% in the Go study. To illustrate the model's utility we estimated lifetime impact of a hypothetical treatment for primary prevention of vascular disease. As vascular risk declined, QALY improved but risk of dialysis increased. At baseline, 20% and 60% reduction: QALYs = 17.6, 18.2, and 19.0 and dialysis = 7.7%, 8.1%, and 10.4%, respectively. Conclusions: The CKD Model is a valid, general purpose model intended as a resource to inform clinical and policy decisions improving CKD care. Its value as a tool is illustrated in our example which projects a relationship between decreasing cardiac disease and increasing ESRD.
Using a Finite Mixture Model of Heterogeneous Households to Delineate Housing Submarkets
(2012) Belasco, Eric J.; Farmer, M. C.; Lipscomb, C.
We use a finite mixture model to identify latent submarkets from household demographics that estimates a separate hedonic regression equation for each submarket. The method is a relatively robust empirical tool to extract submarkets from demographic information with far less effort than suspected. This method draws from latent class models to group observations in a straightforward data-driven manner. Additionally, the unique information about each submarket is easily derived and summarized. Results are also shown to more convincingly sort submarkets than a prior study in the same area that used more comprehensive data.
Determinants of delayed detection of cancers in Texas Counties in the United States of America
(2012-05) Gong, Gordon; Belasco, Eric J.; Hargrave, K. A.; Lyford, C. P.; Phillips, B. U. Jr.
Introduction: Previous studies have shown that delayed detection of several cancers is related to socioeconomic deprivation as measured by the Wellbeing Index (WI) in Texas, the United States of America (USA). The current study investigates whether delayed cancer detection is related to lack of health insurance, physician shortage and higher percentages of Hispanics rather than WI per se since these factors are directly related to delayed cancer detection and may confound WI. Methods: Cancer data and potential determinants of delayed cancer detection are derived from Texas Cancer Registry, Texas State Data Center, and Texas Department of State Health Services and U.S. Census Bureau. Texas cancer data from 1997 to 2003 are aggregated to calculate age-adjusted late- and early-stage cancer detection rates. The WI for each county is computed using data from the USA Census 2000. A weighted Tobit regression model is used to account for population size and censoring. The percentage of late-stage cancer cases is the dependent variable while independent variables include WI and the aforementioned potential confounders. Results: Delayed detection of breast, lung, colorectal and female genital cancers is associated with higher percentage of uninsured residents (p < 0.05). Delayed detection is also associated with physician shortage and lower percentages of Hispanics for certain cancers ceteris paribus ( p < 0.05). The percentage of late-stage cases is positively correlated with WI for lung, and prostate cancers after adjusting for confounders ( p < 0.05). Conclusions: The percentages of uninsured and Hispanic residents as well as physician supply are determinants of delayed detection for several cancers independently of WI, and vice versa. Identification of these determinants provides the evidence-base critical for decision makers to address specific issues for promoting early detection in effective cancer control.
Using Quantile Regression to Measure the Differential Impact of Economic and Demographic Variables on Obesity
(2012-09) Belasco, Eric J.; Chidmi, B.; Lyford, C. P.; Funtanilla, M.
The fight against obesity in the U.S. has become a pressing priority for policy makers due to many undesirable outcomes including escalating health care costs, reduced quality of life and increased mortality. This analysis uses data from the 2007 Behavioral Risk Factor Surveillance System (BRFSS) to evaluate the relationship between behavioral, economic, and demographic factors with BMI while explicitly accounting for systematic heterogeneity using a quantile regression. Results suggest that the effect of exercise, smoking, occupation, and race vary by sizeable amounts from high to low BMI-quantiles. This strongly indicates that future research efforts and policy responses to obesity need to account for these differences in order to develop more effective policies.
Evaluation of Crop Insurance Yield Guarantees and Producer Welfare with Upward Trending Yields
(2012-12) Adhikari, Subodh; Knight, T. O.; Belasco, Eric J.
Actual Production History (APH) yields play a critical role in determining the coverage offered to producers by the Risk Management Agency’s yield-based crop insurance products. Using both county and individual insured unit data, we examine the impact of APH yield trends for Texas cotton and Illinois corn. Our findings indicate that biases due to using simple average APH yields when yields are trending upward reduce the expected indemnity and actuarially fair premium rate. The estimated welfare effect also varies significantly with different commonly used detrending approaches. This study demonstrates that producer welfare can be enhanced through proper treatment of yield trends in crop insurance programs.
Yield Guarantee Determination and the Producer Welfare Benefits of Crop Insurance
(2013) Adhikari, Subodh; Knight, T. O.; Belasco, Eric J.
Farm-level crop insurance guarantees are based on a small sample of historical yields. Two measures enacted by Congress, yield substitution and yield floors, are intended to mitigate the erratic nature of small samples in determining yield guarantees. We examine the impact of small samples and related policy provisions on the producer welfare benefits of individual-level yield insurance. Our findings indicate that sampling variability in Actual Production History (APH) yields has the potential to reduce producer welfare and that the magnitude of this effect differs substantially across crops. The yield substitution and yield floor provisions mitigate the negative impact of sampling error but also bias guarantees upward, increasing government cost of the insurance programs.
Socioeconomic deprivation as a determinant of cancer mortality and the Hispanic paradox in Texas, US
(2013-04) Gong, Gordon; Belasco, Eric J.; Markide, K.; Phillips, B. U. Jr.
Introduction: We have recently reported that delayed cancer detection is associated with the Wellbeing Index (WI) for socioeconomic deprivation, lack of health insurance, physician shortage, and Hispanic ethnicity. The current study investigates whether these factors are determinants of cancer mortality in Texas, the United States of America (USA). Methods: Data for breast, colorectal, female genital system, lung, prostate, and all-type cancers are obtained from the Texas Cancer Registry. A weighted regression model for non-Hispanic whites, Hispanics, and African Americans is used with age-adjusted mortality (2004–2008 data combined) for each county as the dependent variable while independent variables include WI, percentage of the uninsured, and physician supply. Results: Higher mortality for breast, female genital system, lung, and all-type cancers is associated with higher WI among non-Hispanic whites and/or African Americans but with lower WI in Hispanics after adjusting for physician supply and percentage of the uninsured. Mortality for all the cancers studied is in the following order from high to low: African Americans, non-Hispanic whites, and Hispanics. Lung cancer mortality is particularly low in Hispanics, which is only 35% of African Americans’ mortality and 40% of non-Hispanic whites’ mortality. Conclusions: Higher degree of socioeconomic deprivation is associated with higher mortality of several cancers among non-Hispanic whites and African Americans, but with lower mortality among Hispanics in Texas. Also, mortality rates of all these cancers studied are the lowest in Hispanics. Further investigations are needed to better understand the mechanisms of the Hispanic Paradox.
High Tunnels Are My Crop Insurance: An Assessment of Risk Management Tools for Small-Scale Specialty Crop Producers
(2013-08) Belasco, Eric J.; Miles, C.; Wszelaki, Annette L.; Ponnaluru, S.; Galinato, S.; March, T.
High tunnels are being used by specialty crop producers to enhance production yields and quality, extend growing seasons, and protect crops from extreme weather. The tunnels are unheated, plastic-covered structures under which crops are planted directly in the soil, and they provide greater environmental protection and control than open-field production. This study uses field-level experiments to evaluate high-tunnel production. The results suggest that investments in high tunnels can provide increased profits and superior protection against adverse risks relative to crop insurance.
Wet Laws, Drinking Establishments, and Violent Crime
(2014) Anderson, D. Mark; Crost, Benjamin; Rees, Daniel I.
Drawing on county-level data from Kansas for the period 1977-2011, we examine whether plausibly exogenous increases in the number of establishments licensed to sell alcohol by the drink are related to violent crime. During this period, 86 out of 105 counties in Kansas voted to legalize the sale of alcohol to the general public for on-premises consumption. We provide evidence that these counties experienced substantial increases in the total number of establishments with on-premises liquor licenses (e.g., bars and restaurants). Using legalization as an instrument, we show that a 10 percent increase in drinking establishments is associated with a 4 percent increase in violent crime. Reduced-form estimates suggest that legalizing the sale of alcohol to the general public for on-premises consumption is associated with an 11 percent increase in violent crime.
The impact of rural health care accessibility on cancer-related behaviors and outcomes
(Springer, 2014) Belasco, Eric J.; Gong, Gordon; Pence, Barbara; Wilkes, Ethan C.
Background: This research seeks to identify the relationship between economic factors related to the ability to receive and pay for health services and adverse cancer outcomes, as well as preventative screening and behavioral factors that inﬂuence the risk of cancer. We focus on the Northern High Plains region, where we are able to compare regions with extremely low access to health services with those with relatively high levels of access.  Objective: This study aims to identify health disparities in rural communities, particularly among Native American populations, and, thereby, begin to determine the most effective means by which to deliver health services to areas where geography, economics, and culture might prevent traditional models of health delivery from providing sufﬁcient incentives for the prevention of adverse cancer-related outcomes.  Methods: The Health Care Accessibility Index (HCAI) is computed through the use of principal component analysis and includes economic variables as well as variables concerning institutional and geographic access to health care. Index values are then regressed onto cancer outcomes, cancer-prevention outcomes, and cancer-related risk, using weighted least squares and quantile regressions.   Results: Counties with relatively poor access to health care (low HCAI) also have statistically (1) lower breast cancer screening rates, (2) higher smoking prevalence, and (4) higher cancer-related mortality rates. Breast cancer screening is found to be especially sensitive to areas of low health accessibility.   Conclusions: Empirical results provide support for policy efforts to increase the accessibility of health care services that are targeted to areas with mammography screening rates, high obesity rates, high smoking prevalence, as well as areas near Native American reservation territories.
Estimates of U.S. Private Oil and Natural Gas Royalties
(2014-02) Fitzgerald, Timothy; Rucker, Randal R.
The United States is the only country in the world with widespread private ownership of minerals. This private ownership has helped make many citizens rich throughout the country’s history from strikes of precious metals and other minerals, as well as hydrocarbon resources. As the United States enjoys a Renaissance of oil production amidst the current high price environment, the ownership of oil and natural gas resources has reemerged as a critical economic force. Although private oil and gas ownership is acknowledged as an important contributor to innovation in development of unconventional resources and the technologies used to produce them (Yergin 2011), little is known about the aggregate value of private mineral interests. Usually private minerals are leased to developers in exchange for a royalty paid on the basis of gross production revenue as oil and natural gas are extracted. In this paper we estimate aggregate private oil and gas royalty incomes in recent years.
U.S. Private and Natural Gas Royalties: Estimates and Policy Consideration
(2014-03) Fitzgerald, Timothy; Rucker, Randal R.
The Impacts of the Canadian Wheat Board Ruling on the North American Malt Barley Markets
(2014-07) Bekkerman, Anton; Schweizer, Heidi; Smith, Vincent H.
The 2011 Marketing Freedom for Grain Farmers Act deregulated Canadian grain markets and removed the Canadian Wheat Board (CWB) as the sole buyer and seller of Canadian grain. We develop a rational expectations contract decision model that serves as the basis for an empirically informed simulation analysis of malt barley contracting opportunities between Canadian farmers and U.S. maltsters in the deregulated environment. Comparative statics and simulation results indicate that some new opportunities for contracting are possible, but the likelihood of favorable conditions for U.S. maltsters to contract with Canadian rather than U.S. farmers is low—between 9% and 35% over a range of possible selection rates. The effects on contracting of the termination of the Canadian grain transportation revenue cap policy and of the relaxation of criteria for the release of new spring wheat varieties are also investigated. While changes to grain transportation policies are not likely to significantly affect favorable conditions for contracting, reducing constraints on Canadian farmers’ access to higher yielding wheat varieties could increase the returns from growing spring wheat but decrease the likelihood of contracting for malt barley with U.S. maltsters by an average of 5.3 percentage points.
The role of simulations in econometrics pedagogy
(2014-12) Bekkerman, Anton
This article assesses the role of simulation methods in econometrics pedagogy. Technological advances have increased researchers' abilities to use simulation methods and have contributed to a greater presence of simulation-based analysis in econometrics research. Simulations can also have an important role as pedagogical tools in econometrics education by providing a data-driven medium for difficult-to-grasp theoretical ideas to be empirically mimicked and the results to be visualized and interpreted accessibly. Three sample blueprints for implementing simulations to demonstrate foundational econometric principles provide a framework for gauging the effectiveness of simulation analysis as a pedagogical instrument.
On understanding inconsistent disciplinary behaviour in schools
(2015) Bekkerman, Anton; Gilpin, Gregory A.
Inconsistent disciplinary administration across schools can inequitably impact students' education access opportunities by separating certain students from familiar learning environments, especially in misconduct cases that result in longer-term removal. We empirically estimate whether such inconsistencies are attributable to heterogeneity in student body demographic characteristics. The results indicate that a greater number of disciplines that remove students from school for an extended period of time are observed in schools with a higher proportion of black students, but no significant differential punishment effects are observed in schools with a higher Hispanic student population. Furthermore, results of decomposing the marginal effects into conditional and unconditional elasticities indicate that it is not the case that schools with predominantly white student bodies have the least severe punishments and schools with more minority students have the most severe punishments. Rather, schools with inconsistent disciplinary behaviour have a proportion of the inconsistency attributable to the race of the student body.
Pea in Rotation with Wheat Reduced Uncertainty of Economic Returns in Southwest Montana
(2015-01) Miller, Perry R.; Bekkerman, Anton; Jones, Clain A.; Burgess, Macdonald H.; Holmes, Jeffrey A.; Engel, Richard E.
Pea (Pisum sativum L.) is increasingly being rotated with wheat (Triticum aestivum L.) in Montana. Our objective was to compare economic net returns among wheat-only and pea–wheat systems during an established 4-yr crop rotation. The experimental design included three wheat-only (tilled fallow–wheat, no-till fallow–wheat, no-till continuous wheat) and three no-till pea–wheat (pea–wheat, pea brown manure–wheat, and pea forage–wheat) systems as main plots, and high and low available N rates as subplots. Net returns were calculated as the difference between market revenues and operation and input costs associated with machinery, seed and seed treatment, fertilizer, and pesticides. Gross returns for wheat were adjusted to reflect grain protein at “flat” and “sharp” discount/premium schedules based on historical Montana elevator schedules. Cumulative net returns were calculated for four scenarios including high and low available N rates and flat and sharp protein discount/premium schedules. Pea–wheat consistently had the greatest net returns among the six systems studied. Pea fallow–wheat systems exhibited greater economic stability across scenarios but had greater 4-yr returns (US$287 ha–1) than fallow–wheat systems only under the low N rate and sharp protein discount schedule scenario. We concluded that pea–wheat systems can reduce net return uncertainties relative to wheat-only systems under contrasting N fertility regimes, and variable wheat protein discount schedules in southwestern Montana. This implies that pea–wheat rotations, which protected wheat yield and/or protein levels under varying N fertility management, can reduce farmers’ exposure to annual economic variability.
Substance-abuse treatment and mortality
(2015-02) Swensen, Isaac D.
Drug-overdose deaths, which have more than doubled over the past decade, represent a growing public-health concern. Though substance-abuse treatment may be effective in reducing drug abuse, evidence for a causal effect of treatment on drug-related mortality is lacking. I analyze the effect of substance-abuse treatment on mortality by exploiting county-level variation in treatment facilities driven by facility openings and closings. The estimates indicate that a 10% increase in facilities lowers a county's drug-induced mortality rate by 2%. The estimated effects persist across individual and county characteristics and further indicate that spillovers of treatment reduce other related causes of death.
Net Returns from Terrain-Based Variable-Rate Nitrogen Management on Dryland Spring Wheat in Northern Montana
(2015-04) Long, Dan S.; Whitmus, Jeffrey D.; Engel, Richard E.; Brester, Gary W.
Agricultural producers can use variable‐rate application technology to vary N fertilizer within fields. This study was conducted to estimate changes in net returns from implementation of variable‐rate N management (VNM) on hard red spring wheat (Triticum aestivum L.) in a summer‐fallow region in northern Montana. Net return from uniform N management (UNM) traditionally used by producers was compared with that from VNM in eight dryland fields between 1994 and 2004. Field experiments consisted of a replicated series of four to six N rates applied within strips oriented with the length of each field. Management zones (MZs) were created by dividing the fields into upper slopes, south‐facing middle slopes, north‐facing middle slopes, and lower slopes. Nitrogen recommendations for MZs were based on soil N testing and expected yields. Grain yield data were obtained using a production‐size combine equipped with a yield monitor. Mean grain protein and yield were similar between VNM and UNM. Yield differences were <223 kg ha−1 and averaged only 18 kg ha−1. Grain yield did not differ significantly among N rates within MZs. In seven of the eight sites, net returns from VNM were up to US$27.97 ha−1 less than from UNM and were not profitable if Environmental Quality Incentive Program payments of US$6.36 ha−1 were considered as part of net income. Little evidence existed that VNM based on constructed MZs and predetermined N recommendations improves grain yields and profits or reduces N use in water‐limited, summer‐fallow systems of northern Montana.
Why has for-profit colleges' share of higher education expanded so rapidly? Estimating the responsiveness to labor market changes
(2015-04) Gilpin, Gregory A.; Saunders, Joseph M.; Stoddard, Christiana
Over the last two decades, for-profit colleges (FPCs) have substantially increased their share of the higher education market. One potential explanation is that FPC sector may be more responsive to labor market changes than public competitors. Using panel datasets of Associate's degree students, we examine the effects of changes in labor market conditions across various employment fields on enrollment and degree completion in related majors. The results indicate that enrollment and degree completion in the FPC sector is positively related to employment growth and wages in related occupations, while public institutions remain largely unresponsive. Heterogeneity analysis reveals that these relationships are similar across groups of students by gender and ethnicity. Furthermore, the results also indicate that students in public institutions are non-responsive to changes in labor markets associated with requiring an Associate's or Bachelor's degree.