Labeling Regulations and Segregation of First- and, Second-Generation Genetically Modified Products: Innovation Incentives and Welfare Effects, April 2005

We review some of the most significant issues and results on the economic effects of genetically modified (GM) product innovation, with emphasis on the question of GM labeling and the need for costly segregation and identity preservation activities. The analysis is organized around an explicit model that can accommodate the features of both first-generation and second-generation GM products. The model accounts for the proprietary nature of GM innovations and for the critical role of consumer preferences vis-à-vis GM products, as well as for the impacts of segregation and identity preservation and the effects of a mandatory GM labeling regulation. We also investigate briefly a novel question in this setting, the choice of “research direction”when both cost-reducing and quality-enhancing GM innovations are feasible.

Measuring Pavement Profile at the Slip-Form Paver, May 2005

Pavement profile or smoothness has been identified nationally as a good measure of highway user satisfaction. This has led highway engineers to measure profiles of both operating and new highways. Operational highway profiles are often measured with high-speed inertial profilers. New highway profiles are usually measured with profilographs in order to establish incentives or disincentives for pavement construction. In most cases, these two processes do not measure the same value from the “cradle to grave” life of pavements. In an attempt to correct the inconsistency between measuring techniques, lightweight profilers intended to produce values to be used for construction acceptance are being made that measure the same profile as high-speed inertial profilers. Currently, two profiler systems have been identified that can measure pavement profile during construction. This research has produced a field evaluation of the two systems. The profilers evaluated in this study are able to detect roughness in the final profile, including localized roughness and roughness at joints. Dowel basket ripple is a significant source of pavement surface roughness. The profilers evaluated in this study are able to detect dowel basket ripple with enough clarity to warn the paving crew. String-line disturbances degrade smoothness. The profilers evaluated in this study are able to detect some string-line disturbances during paving operations. The profilers evaluated in this study are not currently able to produce the same absolute International Roughness Index (IRI) values on the plastic concrete that can be measured by inertial profilers on the hardened concrete. Construction application guidelines are provided.

Production and Abatement Distortions under Noisy Green Taxes, October 2005

Pigouvian taxes are typically imposed in situations where there is imperfect knowledge on the extent of damage caused by a producing firm. A regulator imposing imperfectly informed Pigouvian taxes may cause the firms that should (should not) produce to shut down (produce). In this paper we use a Bayesian information framework to identify optimal signal-conditioned taxes in the presence of such losses. The tax system involves reducing (increasing) taxes on firms identified as causing high (low) damage. Unfortunately, when an abatement decision has to be made, the tax system that minimizes production distortions also dampens the incentive to abate. In the absence of wrong-firm concerns, a regulator can solve the problem by not adjusting taxes for signal noise. When wrong-firm losses are a concern, the regulator has to trade off losses from distorted production incentives with losses from distorted abatement incentives. The most appropriate policy may involve a combination of instruments.

U.S. Universities’ Net Returns from Patenting and Licensing: A Quantile Regression Analysis, September 2006

In line with the rights and incentives provided by the Bayh-Dole Act of 1980, U.S. universities have increased their involvement in patenting and licensing activities through their own technology transfer offices. Only a few U.S. universities are obtaining large returns, however, whereas others are continuing with these activities despite negligible or negative returns. We assess the U.S. universities’ potential to generate returns from licensing activities by modeling and estimating quantiles of the distribution of net licensing returns conditional on some of their structural characteristics. We find limited prospects for public universities without a medical school everywhere in their distribution. Other groups of universities (private, and public with a medical school) can expect significant but still fairly modest returns only beyond the 0.9th quantile. These findings call into question the appropriateness of the revenue-generating motive for the aggressive rate of patenting and licensing by U.S. universities.

The Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment, November 2006

The ongoing growth of corn-based ethanol production raises some fundamental questions about what impact continued growth will have on U.S. and world agriculture. Estimates of the long-run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas, and distillers grains stay at current levels, then the break-even corn price is $4.05 per bushel. A multi-commodity, multi country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 corn. At this price, corn-based ethanol production would reach 31.5 billion gallons per year, or about 20% of projected U.S. fuel consumption in 2015. Supporting this level of production would require 95.6 million acres of corn to be planted. Total corn production would be approximately 15.6 billion bushels, compared to 11.0 billion bushels today. Most of the additional corn acres come from reduced soybean acreage. Wheat markets would adjust to fulfill increased demand for feed wheat. Corn exports and production of pork and poultry would all be reduced in response to higher corn prices and increased utilization of corn by ethanol plants. These results should not be viewed as a prediction of what will eventually materialize. Rather, they indicate a logical end point to the current incentives to invest in corn-based ethanol plants.

E85 Retail Station Locations in Iowa

House File 2754, relating to renewable fuel and energy, was enacted on May 30, 2006. The Act established goals and incentives for the use of renewable fuel, including E85 gasoline (85 percent ethanol and 15 percent gasoline). Section 33 of the Act states: Sec. 33. DEPARTMENTAL STUDY – E85 GASOLINE AVAILABILITY. The state department of transportation and the department of natural resources shall cooperate to conduct a study to provide methods to inform persons of the availability of E85 gasoline offered for sale and distribution by retail dealers of motor fuel in this state, including the location of each retail motor fuel site where a retail dealer offers E85 gasoline for sale and distribution. The department's study shall include methods for identifying those locations for the convenience of the traveling public including but not limited to the identification of those locations on roadside signs and on the official Iowa map published pursuant to section 307.14. The departments shall jointly prepare and deliver a report to the governor and general assembly, which includes findings and recommendations, not later than January 10, 2007.

Intellectual Property Rights and Crop-Improving R&D under Adaptive Destruction, June 2007

This paper studies how the strength of intellectual property rights (IPRs) affects investments in biological innovations when the value of an innovation is stochastically reduced to zero because of the evolution of pest resistance. We frame the problem as a research and development (R&D) investment game in a duopoly model of sequential innovation. We characterize the incentives to invest in R&D under two competing IPR regimes, which differ in their treatment of the follow-on innovations that become necessary because of pest adaptation. Depending on the magnitude of the R&D cost, ex ante firms might prefer an intellectual property regime with or without a “research exemption” provision. The study of the welfare function that also accounts for benefit spillovers to consumers—which is possible analytically under some parametric conditions, and numerically otherwise—shows that the ranking of the two IPR regimes depends critically on the extent of the R&D cost.

Iowa Values Fund and Business Assistance Programs 2007 Annual Report, 2007

Following is the 2007 Annual Report of the Iowa Values Fund (IVF 2005) and Business Assistance Programs covering activity during Fiscal Year 2007 (FY ‘07) and cumulative for the first four years of the Iowa Values Fund Programs. The IVF (2005) is the primary funding source for a menu of financial assistance programs the Iowa Department of Economic Development (IDED) offers as incentives to Iowa companies to expand here, to recruit new companies into Iowa and assist new entrepreneurial ventures. In addition to IDED the law appropriates IVF (2005) funds for economic development activities to the Board of Regents, the Departments of Cultural Affairs and Natural Resources and to Community Colleges for certain workforce training programs. In addition to the IVF (2005), IDED allocates a portion of Community Development Block Grant and Federal Emergency Stimulus funds and several tax credit programs, all of which are included in this report.

Iowa Conservation Reserve Enhancement Program, Helping Landowners Protect Iowa’s Natural Resources,January 2009

The Iowa Conservation Reserve Enhancement Program is a state, federal, local, and private partnership that provides incentives to landowners who voluntarily establish wetlands for water quality improvement in the tile-drained regions of Iowa. The goal of the program is to reduce nitrogen loads and movement of other agricultural chemicals from croplands to streams and rivers. In addition to improving water quality, these wetlands will provide wildlife habitat and increase recreational opportunities.

Roadway Design Standards for Rural and Suburban Subdivisions Final Report, June 2007

In Iowa, there are currently no uniform design standards for rural and suburban subdivision development roadways. Without uniform design standards, many counties are unable to provide adequate guidance for public facilities, particularly roadways, to be constructed as part of a rural subdivision development. If a developer is not required to install appropriate public improvements or does not do so properly, significant liability and maintenance expenses can be expected, along with the potential for major project costs to correct the situation. Not having uniform design standards for rural and suburban subdivision development improvements in Iowa creates situations where there is potential for inconsistency and confusion. Differences in the way development standards are applied also create incentives or disincentives for developers to initiate subdivision platting in a particular county. With the wide range of standards or lack of standards for local roads in development areas, it is critical that some level of uniformity is created to address equity in development across jurisdictional lines. The standards must be effective in addressing the problem, but they must not be so excessive as to curtail development activities within a local jurisdiction. In order to address the concerns, cities and counties have to work together to identify where growth is going to be focused. Within that long-term growth area, the roadways should be constructed to urban standards to provide an easier transition to traditional urban facilities as the area is developed. Developments outside of the designated growth area should utilize a rural cross section since it is less likely to have concentrated urban development. The developers should be required to develop roadways that are designed for a minimum life of 40 years, and the county should accept dedication of the roadway and be responsible for its maintenance.

Final Report on the Portable Computerized Assessments of Sleepy Drivers in Operational Environments, June 29, 2011

Excessive daytime sleepiness underpins a large number of the reported motor vehicle crashes. Fair and accurate field measures are needed to identify at-risk drivers who have been identified as potentially driving in a sleep deprived state on the basis of erratic driving behavior. The purpose of this research study was to evaluate a set of cognitive tests that can assist Motor Vehicle Enforcement Officers on duty in identifying drivers who may be engaged in sleep impaired driving. Currently no gold standard test exists to judge sleepiness in the field. Previous research has shown that Psychomotor Vigilance Task (PVT) is sensitive to sleep deprivation. The first goal of the current study was to evaluate whether computerized tests of attention and memory, more brief than PVT, would be as sensitive to sleepiness effects. The second goal of the study was to evaluate whether objective and subjective indices of acute and cumulative sleepiness predicted cognitive performance. Findings showed that sleepiness effects were detected in three out of six tasks. Furthermore, PVT was the only task that showed a consistent slowing of both ‘best’, i.e. minimum, and ‘typical’ responses, median RT due to sleepiness. However, PVT failed to show significant associations with objective measures of sleep deprivation (number of hours awake). The findings indicate that sleepiness tests in the field have significant limitations. The findings clearly show that it will not be possible to set absolute performance thresholds to identify sleep-impaired drivers based on cognitive performance on any test. Cooperation with industry to adjust work and rest cycles, and incentives to comply with those regulations will be critical components of a broad policy to prevent sleepy truck drivers from getting on the road.

Use of Incentive/Disincentive Contracting to Mitigate Work Zone Traffic Impacts, 2012

Incentive/disincentive clauses (I/D) are designed to award payments to contractors if they complete work ahead of schedule and to deduct payments if they exceed the completion time. A previously unanswered question is, “Did the costs of the actual work zone impacts that were avoided justify the incentives paid?” This report answers that question affirmatively based on an evaluation of 20 I/D projects in Missouri from 2008 to 2011. Road user costs (RUC) were used to quantify work zone impacts and included travel delays, vehicle operating costs, and crash costs. These were computed using work zone traffic conditions for partial-closure projects and detour volumes and routes for full-closure projects. Conditions during construction were compared to after construction. Crash costs were computed using Highway Safety Manual methodology. Safety Performance Functions produced annual crash frequencies that were translated into crash cost savings. In considering an average project, the percentage of RUC savings was around 13% of the total contract amount, or $444,389 of $3,464,620. The net RUC savings produced was around $7.2 million after subtracting the approximately $1.7 million paid in incentives. In other words, for every dollar paid in incentives, approximately 5.3 dollars of RUC savings resulted. I/D provisions were very successful in saving RUC for projects with full-closure, projects in urban areas, and emergency projects. Rural, non-emergency projects successfully saved RUC but not at the same level as other projects. The I/D contracts were also compared to all Missouri Department of Transportation contracts for the same time period. The results show that I/D projects had a higher on-time completion percentage and a higher number of bids per call than average projects. But I/D projects resulted in 4.52% higher deviation from programmed costs and possibly more changes made after the award. A survey of state transportation departments and contractors showed that both agreed to the same issues that affect the success of I/D contracts. Legal analysis suggests that liquidated damages is preferred to disincentives, since enforceability of disincentives may be an issue. Overall, in terms of work zone impact mitigation, I/D contracts are very effective at a relatively low cost.

09008-005 Hewitt Creek Final Report

The primary goal of the Hewitt Creek watershed council is to have Hewitt-Hickory Creek removed from the Iowa impaired waters (303d) list. Hewitt Creek watershed, a livestock dense 23,005 acre sub-watershed of the Maquoketa River Basin, is 91.2% agricultural and 7.5% woodland. Since 2005, sixty-seven percent of 84 watershed farm operations participated in an organized watershed improvement effort using a performance­ based watershed management approach, reducing annual sediment delivery to the stream by 4,000 tons. Watershed residents realize that water quality improvement efforts require a long-term commitment in order to meet their watershed improvement goals and seek funding for an additional five years to continue their successful watershed improvement project. Cooperators will be provided incentives for improved environmental performance, along with incentives and technical support to address feedlot runoff issues and sub-surface nitrate-nitrogen loss. The Phosphorus Index, Soil Conditioning Index and cornstalk nitrate test will be used by producers as measures of performance to refine nutrient and soil loss management and to determine effective alternatives to reduce nutrient and sediment delivery. Twenty-five livestock operations will improve feedlot runoff control systems and five sub-surface bioreactors will be installed to reduce nitrate delivery from priority tile-drained fields. The Hewitt Creek council will seek additional cost-share funding for high-cost feedlot runoff control structures, sediment control basins and stream bank stabilization projects.

1012-007 Yellow River Headwaters Final Report

The Yellow River Headwaters Watershed (YRHW) drains 26,730 acres of rural land within Winneshiek and Allamakee Counties. While portions of the river have been designated as a High Quality Resource by the State of Iowa, other portions appear on the State's 303(d) List of Impaired Waters due to excessive nutrients, sediment and other water quality issues. The Winneshiek SWCD was fortunate enough to secure WSPF/WPF funds for FY2009 to begin addressing many of the sources of the identified problems, especially along the all-to-critical stream corridor. Initial landowner I producer interest has exceeded expectations and several key BMPs have been installed within the identified critical areas. Yet due to the current budget constraints in the WSPF/WPF programs, we currently have greater landowner I producer interest than we do funds, which is why the District is applying for WIRB funding, to provide supplemental incentives to continue the installation of needed Grade Stabilization Structures, Terraces and Manure Management Systems in identified critical areas. Other funding, currently available to the District, will cover the remaining portions of the project's budget, including staff and our outreach efforts.

07033-013 Dry Run Creek Sub-watershed Final Report

This watershed project will provide technical and financial assistance to improve surface and groundwater quality. This will be accomplished by installing an alternative tile outlet for 3 agricultural drainage wells (ADWs) and providing incentives to implement nutrient and pest management.