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An Innovative Method for Valuing a Region's Local Food System

An Innovative Method for Valuing a Region's Local Food System

The Alward Institute for Collaborative Science is very excited to announce that the Journal of Agricultural and Resource Economics has published our latest research paper: A Method for Evaluating the Economic Contribution of a Local Food System. The paper presents an innovative method for evaluating the contribution of a region’s local food system and was authored by regional economists Phil Watson, Stephen Cooke, David Kay, Gregory Alward, and Alfonso Morales.

In recent years there has been increased interest on the part of policy makers and researchers in quantifying the extent to which a region’s local food system interacts with and contributes to the regional economy. However, given the endogenous nature of local food demands, modeling the contribution that local food systems have on a regional economy has been problematic.

In this paper, we present a combined hypothetical extraction and import substitution social accounting matrix model which provides a theoretically consistent and computationally feasible method for evaluating the regional economic contribution of a local food system. Furthermore, the method we present is insensitive to definitional arguments regarding what specific transactions should be included in a local food system. Finally, using several possible definitions of what constitutes a local food system, we apply this model to the state of Idaho and compare the economic contribution of the local food system with the economic contribution of the export food system.

A draft of the paper is available here. For more information or to comment, please visit our website at www.AlwardInstitute.org, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., or call at 801-473-4253.

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Identifying Opportunities for Growth in Michigan's Forest-product Sectors

Identifying Opportunities for Growth in Michigan's Forest-product Sectors

 

The Alward Institute for Collaborative Science is excited to announce the release of its latest research paper: Identifying Opportunities for Growth in Michigan's Forest-product Sectors. The paper was commissioned by the State of Michigan to help identify which forest-products sectors are likely candidates for future growth. The paper was authored by regional economists Stephen Cooke, David Kay, Gregory Alward, and Philip Watson.

In 2013, Michigan’s Governor Snyder proposed the goal of increasing the contribution of forest products to the state’s economy. The general category of forest products includes logging, primary and secondary wood and paper production and wood furniture. Out of the 535 sectors available in the 2013 IMPLAN data system, forest-product sectors make up twenty-seven. Which forest-product sectors have the greatest growth potential? Which ones offer the best hope of responding positively to state government’s efforts to increase exports, value added, employment and output and also work best with the non-forest-product sectors in the state?

Three analytical models are used to make this determination. Each model uses coefficients derived from IMPLAN social accounting data—annual data from 2007 to 2013 available for each state with more than 400 sectors of detail. The first model generates measures of gross and base value added for Michigan, which identifies the primarily exporting and import substituting sectors. Then the changing shares of value added by sector in the state are used in a SWOT analysis (strength, weakness, opportunity and threats) to determine changing comparative advantage of each of Michigan’s forest-product sectors compared to the baselines of shares for All States and for 2007. Finally, what are the potential bottleneck sectors in the supply chains for forest products? From the induced effect multipliers, structural paths are revealed as a network of directed movements of payments from forest sector production to household consumption. The relative importance of the nodes within these networks is measured as the size of betweenness centrality.

Results from these modeling exercises suggest that ten of twenty-seven forest-product sectors play key roles in the growth of this broadly defined industry in Michigan. Three sectors—office furniture and institutional furniture and paperboard container manufacturing offer an opportunity to expand exports. In the case of containers, these “exports” include increased sales to non-forest-product sectors in the state. Four sectors—paper, paperboard, shelving and veneer manufacturing—can expand both exports, as well as sales to other important forest-product sectors within the state. Three sectors—logging, sawmills and pallets—can increase sales primarily to other important forest-product sectors within the state. In fact, the lack of increased sales by these important “betweenness centrality” sectors, logging in particular, would pose a barrier to the growth in the other important forest product exporting sectors. Hence, we argue that programs and policies should support these industries as needed and where appropriate to encourage import substitution for low value-added forest-product sectors and export expansion for the high value-added ones.

A draft of the paper is available here. For more information or to comment, or to learn how to commission research from the Alward Institute, please visit our website at www.AlwardInstitute.org, email us at This email address is being protected from spambots. You need JavaScript enabled to view it., or call us at 970-217-3942.

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An Innovative Method for Valuing a Region's Local Food System

The Alward Institute for Collaborative Science is very excited to announce that the American Journal of Agricultural Economics has accepted our latest research paper for review: A Method for Evaluating the Economic Contribution of a Local Food System. The paper presents an innovative method for evaluating the contribution of a region’s local food system and was authored by regional economists Phil Watson, David Kay, Gregory Alward, Stephen Cooke, and Alfonso Morales.

In recent years there has been increased interest on the part of policy makers and researchers in quantifying the extent to which a region’s local food system interacts with and contributes to the regional economy. However, given the endogenous nature of local food demands, modeling the contribution that local food systems have on a regional economy has been problematic.

In this paper, we present a combined hypothetical extraction and import substitution social accounting matrix model which provides a theoretically consistent and computationally feasible method for evaluating the regional economic contribution of a local food system. Furthermore, the method we present is insensitive to definitional arguments regarding what specific transactions should be included in a local food system. Finally, using a broad definition of what constitutes a local food system, we apply this model to the state of Wisconsin and compare the economic contribution of the local food system with the economic contribution of the export food system.

A draft of the paper is available here. For more information or to comment, please visit our website at www.AlwardInstitute.org, email us at This email address is being protected from spambots. You need JavaScript enabled to view it., or call us at 970-217-3942.

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Online Map to Visualize Economic Impact of Federal EB-5 Immigration Program

The Alward Institute for Collaborative Science is proud to announce the release of its first online GIS map. Using results from our 2012 economic impact study of the EB-5 immigration program, we’ve been able to visualize the impact of the federal program on all 50 states and 435 congressional districts.

According to our results, we estimate that spending associated with EB-5 regional center investors contributed $3.39 billion to U.S. GDP and supported over 42,000 U.S. jobs in FY2012. Likewise, spending by EB-5 investors also contributed $447 million to federal government tax revenues and $265 million to state and local government tax revenues in FY2012. These estimates include direct, indirect, and induced impacts associated with investment spending, household spending, and other immigration expenses.

To see how these impacts are distributed across states and congressional districts, please follow the link below and then click on the icon to view our 2012 EB-5 Investment Impact map:

http://alward.maps.arcgis.com/home/index.html

For more information or to comment, please visit our website at www.AlwardInstitute.org, email us at This email address is being protected from spambots. You need JavaScript enabled to view it., or call us at 970-217-3942.

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Improving Economic Contribution Studies for Regional Analysis

The Alward Institute for Collaborative Science is proud to announce the publication of its latest journal article by regional economists Phil Watson, Stephen Cooke, David Kay and Gregory Alward: A Method for Improving Economic Contribution Studies for Regional Analysis. The paper was recently published  in Volume 45(1) of the Journal of Regional Analysis and Policy. 

It presents an improved method for economic contribution analysis that utilizes a Leontief Inverse matrix and diagonal matrix of final demand to simultaneously estimate both gross and base measures of output for all industries within a region. These two measures vary by industry but sum to the regional output total observed in the underlying social accounts. When used as a comparative statistic, these two measures provide additional insight into the role an industry plays in supporting economic activity through export expansion (attracting new dollars to a region) or import-substitution (recirculating existing dollars within a region). These insights are useful in understanding the current structure of a regional economy and targeting development strategy accordingly. Additionally, this method also prevents the possibility of double counting, relies on actual data to determine a sector's exogenous sales, and provides a way to rigorously benchmark regional impact studies.

The article is publicly available at http://www.jrap-journal.org/. For more information please visit our website at www.AlwardInstitute.org, email us at This email address is being protected from spambots. You need JavaScript enabled to view it., or call us at 970-217-3942.

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