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Working Papers

The Economic Impacts of Ecosystem Disruptions: Costs From Substituting Biological Pest Control

(New draft is available upon request)

Abstract: Increasing biodiversity losses raise the importance of understanding the impacts of ecosystem disruptions on human well-being. Bats are a natural predator of insects, but their provision of biological pest control declined following the emergence of a wildlife disease, White Nose Syndrome, which led to high mortality in North American bat populations. Here I use this unexpected decline in biological pest control as a natural experiment that allows me to infer the importance of bats to agriculture and human health. I find that farmers compensated and increased their insecticide use by 31.1%. The compensatory behavior by farmers adversely affected health, as human infant mortality increased by 7.9% in the counties that experienced the bat die-offs. These findings highlight that ecosystem disruptions could have meaningful social costs.

Map shows the expansion of White Nose Syndrome (WNS) over time in the Northeastern part of the US. The estimation results show the evolution of insecticide use and infant mortality following the bat population losses caused by WNS.

The Social Costs of Keystone Species Collapse: Evidence From The Decline of Vultures in India (Conditionally Accepted at The American Economic Review)

Joint with Anant Sudarshan

Abstract: The loss of a keystone species can theoretically lead to large social costs because their complex ecosystem interactions may be important for environmental quality. We quantify these effects for the case of vultures in India where they play an important role in removing livestock carrion from the environment. The expiration of a patent for a common chemical painkiller led to its increased use in cattle, unexpectedly rendering carcasses fatal to vultures, leading to a catastrophic and near-total population collapse. Using habitat range maps for the affected species, we compare high to low vulture suitability districts before and after the patent for the painkiller expired. We find that, on average, all-cause death rates increased by more than 4% in vulture-suitable districts after the vultures nearly went extinct. We find suggestive evidence that feral dog populations and rabies increased, and that water quality deteriorated in the affected regions. These mechanisms are consistent with the loss of the scavenging function of the vultures. Quantifying the costs of biodiversity losses has critical implications for optimal investments into species conservation and rehabilitation.

 

Media:

VoxDev (reprinted at Ideas for India: English, Hindi)

The Pie Podcast

economiate

The Economist

Map shows the classification of districts in India (held at their 1981 borders) based on their mean overlap of diclofenac-affected vulture species, and baseline levels of livestock agriculture. The panels on the right show national-level trends in the price and sales of diclofenac (the drug responsible for the collapse in vulture populations), the share of observations of the affected vultures relative to other bird species, and the trends in population-weighted all-cause death rates by high and low suitability for the diclofenac-affected vultures classification groups

Regulating Biological Resources: Lessons from Marine Fisheries in the United States (Revisions requested at The Review of Economic Studies)

Joint with Kimberly Oremus 

Abstract: Can policy sustainably manage economically valuable biological resources? We find evidence it can, with the use of science-based decision rules. In 1996, with United States fish populations in decline, Congress overhauled fishing laws with scientific thresholds for rebuilding overfished stocks. The law’s impact is contested, and lawmakers have spent a decade debating its reauthorization. We develop the first causally interpretable evaluation of this law, exploiting the fact that the European Union has comparable fisheries but only recently developed similar laws. Compiling the largest dataset to date on US and EU fishery status and management, we examine fish populations that decline to unhealthy levels and measure the effect of a policy that aims to rebuild them to health. We find that treated stocks increase by 50% relative to these counterfactuals. Though the policy constrains catch, we find both catch and revenue ultimately rebound and stabilize at or above baseline levels.

Main estimation results for stock biomass from the two research designs in the paper (contemporaneous comparison US to EU stock, and historical comparison of present-US to past-US).

The Cost of Species Protection: The Land Market Impacts of the Endangered Species Act (Draft available upon request)

Joint with Maximilian Auffhammer, David W. McLaughlin, Beia Spiller, and David L. Sunding

Protecting species’ habitats is globally adopted as the main policy tool to reduce biodiversity losses, yet these protections are hypothesized to conflict with private landowners’ interests. We study the economic consequences of such regulation in the context of the Endangered Species Act (ESA), the most extensive conservation and controversial piece of environmental legislation in US history. Using the most comprehensive data on species conservation efforts, land transactions, and building permits to date, we show evidence that the ESA affects land markets in measurable and economically significant ways. Our findings highlight that the impacts on land values depend on the timing of statutory protection enactment, and the land-use in question. We also find no evidence of the ESA affecting building activity as measured by construction permits.

The timing of listings of species under the Endangered Species Act

Reversing Local Extinctions: The Economic Impacts of Reintroducing Wolves in North America

Joint with Anouch Missirian, Dominic Parker, and Jennifer Raynor

Abstract: In an attempt to reverse previous local extinction events, several countries have designed programs to reintroduce species, from butterflies to large predators. We evaluate the economic impacts from the reintroduction of wolves, and analyze both the direct effects on livestock and the indirect effects of wolves through their interactions with non-livestock species such as coyotes and deer. We use data on livestock losses, farm income, and vehicle collisions to examine the benefits and costs of reintroducing wolves through their direct and indirect species interactions. Our analysis relies on the quasi-experimental variation from the timing of reintroduction programs that vary by state, and the migration of wolves across administrative borders. We find that wolf recovery does not decrease livestock revenue, productivity, or total losses. Rather, we find that wolf recovery leads to a sharp decrease in predation losses for calves, likely by killing or driving out coyotes. For crops, we find that wolf recovery has no effect on total crop revenue or crop insurance payments, which suggests wolves have little effect on damage caused by deer and other cervids. We find that all-cause vehicle collision rates decline following the reintroduction of wolves, driven mostly by animal-related collisions, but those are strictly concentrated in one out of six states. Finally, we find a meaningful discontinuity in animal-related vehicle collisions around the Saint Lawrence River, in Canada, where wolves are found north, but not south of the river. Our findings make it clear that focusing only on the most obvious direct damages from wolves — as policy debates often do — would yield a miscalculation of net economic losses or benefits, and that spatial heterogeneity is large both for the damages and benefits. This has implications for current and planned wolf reintroduction programs, as well as reintroduction programs for other predator species across the world.

A schematic model connecting the different trophic cascade effects that wolves have on the outcomes of agricultural operations, and vehicle collisions.

Chinese live animal imports fell following the SARS epidemic, but only temporarily

Joint with Jonathan Colmer

Abstract: Recent zoonotic disease outbreaks have been traced to wet markets where humans come into close contact with livestock and wild-caught animals. These outbreaks reveal new information about the risks of human-animal interactions. Because previous research has documented both temporary as well as permanent responses to abrupt shocks, it remains unclear how consumers respond following zoonotic disease outbreaks. Here we study the effect of the 2003 SARS epidemic on the live animal trade. Using data on 347,614 import flows for 170 countries, spanning 24 years, we find that SARS initially reduced import demand for live animals by 20% in China, Hong Kong, and Macao (areas that were heavily affected). While the reduction in demand was large, it did not persist, and imports returned to their pre-SARS levels by 2010. These demand dynamics inform ongoing policy discussions on whether regulating wild-caught animal consumption is necessary to prevent future outbreaks.

Difference-in-difference estimation results for live animal imports into China, Hong Kong, and Macao, relative to other countries around the time of the SARS epidemic outbreak in 2002/2003.

The “Golden Age” of Pesticides? Trade-offs of DDT and Health in the US

Joint with Charles A. Taylor

Abstract: New technologies that deliver large improvements see widespread adoption, even if little is known at the time regarding potential adverse side effects. An example is the rapid and widespread adoption of DDT for civilian use after World War II, which ushered an era of high synthetic pesticide use. In the years after its introduction in the US, evidence linking DDT with harmful impacts on wildlife and cancer incidence in humans led to a ban in the US in 1972. Currently, DDT is still used in 24 countries, and there are periodic calls to cancel its ban. In this paper, we use several natural experiments that created variation in DDT use to test its historical impact on health. We find strong evidence that in the US South, where DDT was used extensively in cotton production, infant mortality rates (IMR) increased by 11% relative to the baseline in 1945. Looking at DDT use for the control of forest insects, we find suggestive evidence of increased IMR in some regions but not others. In a public health setting, we find inconclusive results in relation to CDC-led DDT spraying programs for malaria and typhus control. These results highlight DDT’s overall negative effect on health, but shows that the impacts vary depending on the setting and application intensity.

Map shows the classification of counties as high or low cotton intensity based on the share of cotton acres before the introduction of DDT in the US. Infant mortality rates are summarized over time by the baseline cotton intensity group. Difference-in-differences results compare infant mortality rates in the high versus the low-intensity counties.

Work in Progress

Escaping a Negative Marginal Return Equilibrium: Evidence From Vietnam’s Pesticide Use 

Joint with Fiona Burlig, and Jaehyun Jung

Farmers in Vietnam’s Mekong Delta were historically applying up to five times more insecticides than neighboring areas. This high spraying regime resulted in killing all the natural predators of the main rice crop pest, the brown planthopper, that was practically immune to insecticides. While it was potentially beneficial to collectively shift to lower input use in order to maintain the natural enemies of the brown planthopper, doing so individually embedded a large risk. Any farmer in this equilibrium of high input use that would have attempted to reduce their insecticide use would have risked having their fields become a safe-haven for the pests from neighboring fields. Starting in 2003, the government implemented several extension programs in the form of media communications, namely a soap opera over the radio about the success experienced by a farmer that reduced their agrochemical input intensity. We study the impacts on health, agricultural productivity, and water pollution. Our results show that coordinated effort allowed farmers to reduce pesticide use, with no adverse effects on yields, and with large improvements to infant health.

Difference-in-differences results for the infant mortality rate in the Mekong Delta relative to the Red River Delta in Vietnam.

The Impacts of Right-To-Farm Laws on Agricultural Productivity 

Joint with Anthony D’Agostino, and Claire Palandri

In the late 70s and 80s, there was an internal migration wave where Americans were moving to the rural areas of the country in pursuit of pastoral scenery. To their surprise, they encountered vast farmlands that were the source of noise, odor, and other nuisances. New residents started filing lawsuits in order to enjoin farm operations. Farmers argued that without having well-established property rights over their ability to operate they would reduce investments in their farms, or divest from them altogether. In response, many states passed Right-To-Farm Laws that exempted farmers from nuisance lawsuits under certain conditions. In some states, counties already preempted these laws with local ordinances. We use the staggered enactment of the laws and ordinances to study how they affected farmland conversion, and agricultural productivity.

The year in which each US state enacted a Right-To-Farm Law.

Willingness-To-Pay for Natural Enemies in Ecosystem Interactions: Evidence From Gypsy Moth Defoliation in the United States

Joint with Sushant Banjara, Greg Dwyer, and Andrew M. Liebhold

Since its first introduction to the US in the early 1900s, the gypsy moth has been damaging forests, and expanding its range into new territories. Despite suppression efforts by the US Forest Service, there were considerable outbreaks with high levels of tree defoliation and mortality throughout 1970-1990. Beyond the direct damages to the forestry sector, gypsy moth outbreaks reduce local amenities. In the early 90s, a fungal pathogen that feeds on gypsy moth larvae established itself in the Northeast, and disrupted the outbreak cycle of the moth. However, during warm and dry springs the fungal pathogen is less effective in controlling the population growth of the gypsy moth. Here we leverage data on moth traps, defoliation levels, weather conditions, and housing sale prices to examine the degree to which the fungal pathogen is sensitive to weather conditions, how this maps to defoliation probability, and how contemporaneous and lagged defoliation events affect housing values.

The expansion of gypsy moth across the US over time, along with defoliated acres by county over time.

When Do Incentives for Preemptive Action Erode Gains from Policy? Studying the Effectiveness of the Endangered Species Act

Joint with Sushant Banjara, and Anouch Missirian

Optimal policy design regarding the management of land resources requires an understanding of how incentives affect preemptive action by private landowners. Such policies can create land-use restrictions that raise development costs, and reduce future payoffs. When exposure to the policy is determined by specific characteristics of the land area, landowners could be incentivized to preemptively modify those attributes, so that they are exempted from the policy. Consequently, a land-use policy that seeks to sustain certain traits can result in a behavioral response that erodes them. The U.S. Endangered Species Act of 1973 (ESA) aims to preserve the natural environments upon which species depend, as habitat degradation is the primary driver of biodiversity loss. Currently, over 80% of all land in the U.S. is regulated by the ESA on account of at least one species, but the associated incentives make the significance of this figure for conservation unclear. Previous work on the effects of land-use policies has faced two key challenges: measurement and inference. Large-scale data on changes in land cover have only recently become easily accessible for analysis, and only the most recent data products allow observation of land cover variation at a sub-annual level. Additionally, the non-random assignment of land-use restrictions presents an obstacle in constructing valid counterfactuals. Here, we leverage a feature of the listing process under the Act that creates treatment and control groups. Each year, multiple biological evaluations conclude that protection is warranted, but not granted because of budget constraints. Thus only a subset of evaluated species leads to binding constraints. Using fine-scaled spatial and temporal data on land cover changes spanning 1985-2017 for the conterminous U.S., we compare land-use changes between protected and protection-warranted species, and test for preemptive action by private landowners.

Staggered-difference-in-differences results for the conversion of land from non-developed to developed, derived from LANDSAT data, following proposed and final rules by the Fish and Wildlife Service to list species under the Endangered Species Act, relative to species in “warranted-but-precluded” status.

Publications

Underfished or unwanted? Much blame cast upon fisheries policy may be misguided 2023. Kimberly L. Oremus, Eyal G. Frank, Jesse Jian Adelman, Seleni Cruz, Janna Herndon, Brad Sewell, and Lisa Suatoni. Science, 380(6645): 585-88.

Abstract: With many fish populations around the world overfished, countries are increasingly passing laws to prevent overfishing and rebuild depleted stocks, an objective adopted in the UN Sustainable Development Goals. However, some elected officials, scientists, and industry groups in the US and Europe have questioned whether such policies have gone too far, resulting in “underfishing,” to the economic detriment of fishing communities. This idea is influencing debate over reauthorizing the US Magnuson-Stevens Act (MSA), which shares key features with fishing policies in the European Union (EU) and Canada and is regarded internationally as a benchmark fishing law. Analyzing two decades of data on 170 US fish stocks, we find that the reasons some species are fished less than others are varied, and the MSA is only sometimes the primary factor. In many cases, fishers are fishing less of a species because they find it unprofitable.

 

Research Summary (EPIC)

Summarizing data for 170 stocks in the United States that have sufficient data to evaluate whether they are potentially underutilized and less fished (PLUF). Our analysis finds that 88 out of the 170 stocks are above biomass target levels and below the overfishing threshold for at least 50% of the years between 1996 to 2015. Of those 88 stocks, 41 are PLUF because there is insufficient demand for them. Scientific uncertainty and bycatch constraints are other factors that lead to underutilization, while other stocks either experience a combination of reasons, or idiosyncratic reasons.

Labor market impacts of land protection: The Northern Spotted Owl 2021. Ann E. Ferris, Eyal G. Frank. Journal of Environmental Economics and Management. (109):102480

Abstract: Environmental policies often draw criticism due to their potential impacts on labor market outcomes. Previous work has studied sector-specific impacts following air quality regulations, or examined overall employment effects of land-use policies. In the case of the protection of the Northern Spotted Owl in the 1990s under the Endangered Species Act, millions of acres of highly productive federal timberland in the Pacific Northwest were set aside. Concerns regarding declining employment in the timber industry following the listing are often mentioned as a cautionary tale regarding future listings under the Act. However, disentangling the policy impact from other economic factors affecting employment such as recessions and sector-specific trends is challenging. Here we exploit the 1990 listing of the owl to identify the impact of land protections on labor market outcomes in the timber industry. Our main results indicate large reductions in timber industry employment and the number of establishments, by 28.1% and 9.5%, that persist even a decade after the listing, reflecting a loss of 32,676 jobs in the Lumber and Wood Products sector. We find heterogeneous effects with areas that have larger shares of protected federal timberland experiencing larger declines in employment. Our findings indicate land protection policies may pose significant employment impacts to land-reliant industries.

(Summary in Forbes, twitter thread)

Media:

Energy and Environment News

Portland Business Journal

Map shows the counties that overlap with the habitat range and designation critical habitats for the Northern Spotted Owl (NSO). Estimation results show the difference-in-differences (NSO counties relative to counties outside CA, OR, and WA) for employment and establishments in the Lumber and Wood Products sector.

Biodiversity and thermal ecological function: The influence of freshwater algal diversity on local thermal environments. 2019. A. Missirian, E.G. Frank, J.T. Gersony, J.C.Y. Wong, S. Naeem. Ecology & Evolution, 00:1-10.

Results from manipulating algae biodiversity and examining how it changes the thermal properties of the body of water following exposure to light.

Bars summarize the degree of overlap between species flagged as Threatened with extinction, are involved in wildlife trade, and their protection status in a global treaty meant to protect species from overexploitation.

Balancing economic and ecological goals. 2016. E.G. Frank, W. Schlenker. Science, 353(600):651-652.

Correlation between the share of protected area and country’s GDPc, as well as how area under protection changed following the 1992 Earth Summit.

Particulate Matter Concentrations, Sandstorms and Respiratory Hospital Admissions in Israel. 2015. A. Ebenstein, E.G. Frank, Y. Reingewertz. Israeli Medical Association Journal, 17:628-632.

Tide gauge location and the measurement of global sea level rise. 2015. M. Beenstock, D.Felsenstein, E.G. Frank, Y. Reingewertz. Environmental and Ecological Statistics, 22(1): 1-28.