Regional growth, structural change, and natural disaster

Hurricanes, earthquakes, floods, and other serious natural hazards have been attributed with causing changes in regional economic growth, income, employment, and wealth. Natural disasters are said to cause; (1) an acceleration of existing economic trends; (2) an expansion of employment and income, due to recovery operations (the so-called silver lining); and (3) an alteration in the structure of regional economic activity due to changes in "intra" and "inter" regional trading patterns, and technological change.^ Theoretical and stylized disaster simulations (Cochrane 1975; Haas, Cochrane, and Kates 1977; Petak et al. 1982; Ellson et al. 1983, 1984; Boisvert 1992; Brookshire and McKee 1992) point towards a wide scope of possible negative and long lasting impacts upon economic activity and structure. This work examines the consequences of Hurricane Andrew on Dade County's economy. Following the work of Ellson et al. (1984), Guimaraes et al. (1993), and West and Lenze (1993; 1994), a regional econometric forecasting model (DCEFM) using a framework of "with" and "without" the hurricane is constructed and utilized to assess Hurricane Andrew's impact on the structure and level of economic activity in Dade County, Florida.^ The results of the simulation exercises show that the direct economic impact associated with Hurricane Andrew on Dade County is of short duration, and of isolated sectoral impact, with impact generally limited to construction, TCP (transportation, communications, and public utilities), and agricultural sectors. Regional growth, and changes in income and employment reacted directly to, and within the range and direction set by national economic activity. The simulations also lead to the conclusion that areal extent, infrastructure, and sector specific damages or impacts, as opposed to monetary losses, are the primary determinants of a disaster's effects upon employment, income, growth, and economic structure. ^

Pivot or periphery? Xinjiang's regional development and Chinese-Central Asian relations at the century's end

Xinjiang, once described by Owen Lattimore as the "pivot of Asia", has played a strategically important role in China's national defense and security. Historically linked on the famous Silk Road with Central Asia, Xinjiang was crucial to East-West economic and cultural exchanges. During the period of Russian/Soviet expansion into Central Asia and Sino-Soviet rivalry, China's need for Xinjiang's defense and territorial integrity became paramount, and consequently Xinjiang's economy was relegated to the periphery.^ The demise of the Soviet Union--which resulted in the independence of five Central Asian states--and China's reform suggest dramatic new possibilities for Xinjiang's regional development as well as interregional cooperation. As China has begun to shift regional emphasis to the interior, Xinjiang's economic development will be accelerated. With the growth of Sino/Xinjiang-Central Asian relations, Xinjiang's importance will not only be borne out in terms of defense and security, but more significantly in terms of trade and economics. At the century's end and the beginning of the 21st century, Xinjiang will likely move away from the periphery and play an increasingly pivotal role in the economy. ^

On the accuracy of nonsurvey regional input-output multipliers: An empirical study

Correct specification of the simple location quotients in regionalizing the national direct requirements table is essential to the accuracy of regional input-output multipliers. The purpose of this research is to examine the relative accuracy of these multipliers when earnings, employment, number of establishments, and payroll data specify the simple location quotients.^ For each specification type, I derive a column of total output multipliers and a column of total income multipliers. These multipliers are based on the 1987 benchmark input-output accounts of the U.S. economy and 1988-1992 state of Florida data.^ Error sign tests, and Standardized Mean Absolute Deviation (SMAD) statistics indicate that the output multiplier estimates overestimate the output multipliers published by the Department of Commerce-Bureau of Economic Analysis (BEA) for the state of Florida. In contrast, the income multiplier estimates underestimate the BEA's income multipliers. For a given multiplier type, the Spearman-rank correlation analysis shows that the multiplier estimates and the BEA multipliers have statistically different rank ordering of row elements. The above tests also find no significant different differences, both in size and ranking distributions, among the vectors of multiplier estimates. ^

Quantifying the Impacts of the Recent Economic Crisis on Regional Tourism Industry and Economy

The purpose of this study is to explore the accuracy issue of the Input-Output model in quantifying the impacts of the 2007 economic crisis on a local tourism industry and economy. Though the model has been used in the tourism impact analysis, its estimation accuracy is rarely verified empirically. The Metro Orlando area in Florida is investigated as an empirical study, and the negative change in visitor expenditure between 2007 and 2008 is taken as the direct shock. The total impacts are assessed in terms of output and employment, and are compared with the actual data. This study finds that there are surprisingly large discrepancies among the estimated and actual results, and the Input-Output model appears to overestimate the negative impacts. By investigating the local economic activities during the study period, this study made some exploratory efforts in explaining such discrepancies. Theoretical and practical implications are then suggested.

Essays on intergenerational and regional aspects of water management

This dissertation consists of three essays on different aspects of water management. The first essay focuses on the sustainability of freshwater use by introducing the notion that altruistic parents do bequeath economic assets for their offspring. Constructing a two-period, over-lapping generational model, an optimal ratio of consumption and pollution for old and young generations in each period is determined. Optimal levels of water consumption and pollution change according to different parameters, such as, altruistic degree, natural recharge rate, and population growth. The second essay concerns water sharing between countries in the case of trans-boundary river basins. The paper recognizes that side payments fail to forge water-sharing agreement among the international community and that downstream countries have weak bargaining power. An interconnected game approach is developed by linking the water allocation issue with other non-water issues such as trade or border security problems, creating symmetry between countries in bargaining power. An interconnected game forces two countries to at least partially cooperate under some circumstances. The third essay introduces the concept of virtual water (VW) into a traditional international trade model in order to estimate water savings for a water scarce country. A two country, two products and two factors trade model is developed, which includes not only consumers and producer's surplus, but also environmental externality of water use. The model shows that VW trade saves water and increases global and local welfare. This study should help policy makers to design appropriate subsidy or tax policy to promote water savings especially in water scarce countries.^

On the accuracy of nonsurvey regional input-output multipliers : An empirical study

Correct specification of the simple location quotients in regionalizing the national direct requirements table is essential to the accuracy of regional input-output multipliers. The purpose of this research is to examine the relative accuracy of these multipliers when earnings, employment, number of establishments, and payroll data specify the simple location quotients. For each specification type, I derive a column of total output multipliers and a column of total income multipliers. These multipliers are based on the 1987 benchmark input-output accounts of the U.S. economy and 1988-1992 state of Florida data. Error sign tests, and Standardized Mean Absolute Deviation (SMAD) statistics indicate that the output multiplier estimates overestimate the output multipliers published by the Department of Commerce-Bureau of Economic Analysis (BEA) for the state of Florida. In contrast, the income multiplier estimates underestimate the BEA's income multipliers. For a given multiplier type, the Spearman-rank correlation analysis shows that the multiplier estimates and the BEA multipliers have statistically different rank ordering of row elements. The above tests also find no significant different differences, both in size and ranking distributions, among the vectors of multiplier estimates.