Economics

Research sheds light on unintended consequences of money laundering regulations

Rachel Sauer — Wed, 28 Jan 2026 15:37:54 +0000

Research sheds light on unintended consequences of money laundering regulations Rachel Sauer Wed, 01/28/2026 - 08:37

Bradley Worrell

��Ҵ�ý�ƽ�� economist Alessandro Peri finds that when authorities cracked down on offshore money laundering, criminals redirected that money into domestic businesses and properties

Economists traditionally focus on economic indicators such as growth, inflation and trade—not on organized crime. Yet a recent paper co-authored by Alessandro Peri, an economist and associate professor in the University of Colorado Boulder Department of Economics, dives deep into the economics of money laundering, exploring how international regulations meant to tamp down the practice in one part of the world can inadvertently cause it to take hold in different areas and in different ways.

Peri says his interest in money laundering was sparked in 2018 after attending a presentation on the topic. He also notes that his interest in the phenomenon of riciclaggio di denaro—Italian for money laundering—was partly shaped by his father, who worked for Guarda di Finanza, the Italian tax enforcement agency tasked with fighting financial crimes.

“I have always been fascinated by the phenomenon,” says Peri, whose research focuses on the macroeconomic implications of economic policy and legislative changes. “Specifically, on the process through which illicit profits—from drugs, counterfeit goods or other illegal activities—find their way into legitimate businesses and the real economy.”

��Ҵ�ý�ƽ�� economist Alessandro Peri and his research colleagues find that international regulations meant to tamp down money laundering in one part of the world can inadvertently cause it to take hold in different areas and in different ways.

To understand money laundering, Peri says it’s important to grasp its purpose. Criminal enterprises—from drug cartels to counterfeit goods networks—generate mountains of “dirty” cash that needs to find its way into the legitimate economy. Traditionally, banks were the preferred channel to make “dirty” money look “clean.”

In their research, Peri and his co-authors take a step further and explore the question: What happens when governments make it harder for criminals to hide illegal money in offshore banks? The answer, they discovered, is that criminals don’t stop laundering money. They often just switch to other methods and re-channel dirty funds from offshore financial account to domestic activities (such as local businesses) in the United States, a process they call “money laundering leakage.”

“If you target only one channel, the money leaks into others,” Peri explains. “It’s like squeezing a balloon.”

Tightening regulations

To address this question, the authors focused on a tightening in anti-money-laundering regulations that in 2009 involved Caribbean nations, historically considered havens for both tax evasion and money laundering. Peri says both of those activities exploit weak oversight, but their economic impacts differ, as stricter tax enforcement may reduce domestic investment, given that firms can no longer save on taxes, whereas tighter laundering controls can cause criminals to look for new domestic channels to “clean” their illicit gains.

Facing international pressure, Peri says Caribbean countries formed the Caribbean Financial Action Task Force, and from 2008 to 2015 underwent a mutual evaluation process aimed at curbing money laundering activities by strengthening oversight of financial institutions and enforcing compliance across jurisdictions.

“Passing laws is not enough. Enforcement of the law is just as important, and over time these countries did a really good job of that,” Peri says. As a result, laundering operations via financial havens became more difficult and expensive.

At the same time, Peri and his co-authors document how that action resulted in unintended consequences, by providing indirect evidence of a re-channeling of these offshore laundering operations into the United States.

Measuring the impact

How do you study an activity designed to be invisible?

Peri’s team employed some creative methods, including using information uncovered by investigative journalists in the Panama Papers—which documented financial linkages between U.S. localities and Caribbean jurisdictions—to determine which counties had stronger exposure to the regulatory changes happening in the Caribbean jurisdictions.

The researchers then used county-level data from U.S. Bureau of Labor Statistics from 2004 to 2015 to look at patterns in business activities. In U.S. counties with stronger financial connections to Caribbean jurisdictions, Peri and his co-authors were able to determine that there was a measurable uptick in business establishments—particularly small, cash-intensive firms. Peri says such businesses often exhibit telltale signs of “front companies”: few employees, unusual revenue patterns and operations in cash-intensive businesses such as liquor stores, laundromats, florists, restaurants and car dealerships.

Additionally, Peri says he and his colleagues found that cash-based real estate purchases increased—another common way criminals use to clean illegal money. “Someone seeking to clean criminal proceeds may purchase a home and quickly resell,” he says.

“If a crook were to launder money, they wouldn’t buy a multi-million-dollar company (like Apple), as they would get detected. They’d buy a car wash, which makes it much less likely to get audited,” says ��Ҵ�ý�ƽ�� researcher Alessandro Peri about money laundering. (Photo: Jason Leung/Unsplash)

“This started as a theory paper, but in the end, we were able to provide some indirect evidence of how offshore AML (anti-money laundering) efforts impacted money laundering (in the U.S.) and its impact on local economies,” he says.

Notably, the evidence suggests a more pronounced increase in the use of front companies in high-intensity drug-trafficking areas, suggesting a link between local illicit economies and laundering demand, Peri says.

Ultimately, laundering decisions hinge on a cost-benefit analysis, Peri says, as criminals weigh the risk of detection against the need to legitimize funds.

“If a crook were to launder money, they wouldn’t buy a multi-million-dollar company (like Apple), as they would get detected,” he says. “They’d buy a car wash, which makes it much less likely to get audited.”

He says the smartest operations focus on diversification—buying a handful of businesses across sectors and locations rather than concentrating their operations in one sector.

“Hypothetically, if they went out and bought every restaurant in Boulder, they would probably get detected and audited,” Peri explains. “But if they buy just a few restaurants, as well as some florists and auto dealerships to diversify their operations, it likely reduces their risk of getting caught. That’s what we believe is at the heart of this process of diversification.”

The scale of the challenge

In pop culture, money laundering is portrayed as a shadowy process involving suitcases full of cash and offshore accounts. From Scarface to Breaking Bad, the trope is familiar: illicit profits transformed into legitimate wealth through clever schemes.

Peri says those cinematic dramas don’t do justice to how sophisticated modern money laundering schemes have become or the scope of such operations today. The United Nations Oﬃce on Drugs and Crime estimates that money laundering is a trillion-dollar problem, accounting for nearly 5% of global gross domestic product (GDP) annually. That’s roughly equivalent to the entire economic output of Germany, he notes.

What’s more, Peri says money laundering isn’t just a criminal issue—it’s an economic one. He says that by injecting illicit funds into legitimate markets, money laundering can distort local markets, misallocate resources and crowd out legitimate firms. For example, when illicit funds flood into real estate, housing prices can soar, pricing out ordinary families.

“Are these firms creating jobs? Yes,” he notes. “But at what cost to the local economies? The answer is unclear and requires further research.”

The scope of the challenge is daunting, Peri says, and the field of money laundering is evolving. In addition to traditional channels for cleaning currency, he says he believes criminal organizations engaged in money laundering are now purchasing cryptocurrencies like Bitcoin and engaging in complex trading schemes that can add layers of opacity to their operations.

“Partial measures create leakage. To be effective, enforcement must be coordinated across financial and non-financial channels, and across borders.”

“We just scratched the surface,” he says of what his research uncovered. “There are always new methods.”

A call for vigilance

What should governments do about money laundering?

Peri’s paper stops short of prescribing detailed enforcement strategies, but he says his research does underscore two imperatives. First, domestic agencies including financial regulators, tax authorities and law enforcement must collaborate, and international agencies must harmonize standards. Second, Peri says targeting one channel is insufficient, so efforts must span financial systems, real estate and emerging technologies such as cryptocurrencies.

Peri draws an analogy to climate policy, which is also a research focus of his. Just as carbon emissions shift to countries with lax regulations, he says dirty money flows to jurisdictions—or sectors—where oversight is weakest.

“Partial measures create leakage,” he warns. “To be effective, enforcement must be coordinated across financial and non-financial channels, and across borders.”

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Welcome to the Camping Games (now please show up)

Rachel Sauer — Tue, 20 Jan 2026 15:06:01 +0000

Welcome to the Camping Games (now please show up) Rachel Sauer Tue, 01/20/2026 - 08:06

Rachel Sauer

The world of campsite reservations is increasingly cutthroat, so why are so many campers not showing up? ��Ҵ�ý�ƽ�� economist Jon Hughes applies numerical modeling to understand campground no-shows

Throughout the United States, and especially here in the West, snagging a preferred public-land campsite has become a take-no-prisoners battle royale with little room for weakness or sleep or mercy.

If your friends seem especially haunted and jittery these days, it’s possibly because they’ve been up for hours, hitting refresh every 30 seconds on every computer, tablet and smartphone in the house, trying to reserve a summer campsite the millisecond it becomes available online—six months to the day in advance and at midnight for Colorado state parks and 8 a.m. MST for federal lands.

With so much summer enjoyment on the line, then, and reservations more precious than gold, it’s a central mystery of outdoor recreation why park managers and users report high summer campground vacancy rates due to no-shows.

Jon Hughes, a ��Ҵ�ý�ƽ�� associate professor of economics and Renewable and Sustainable Energy Institute fellow, found through numerical modeling that that increasing fees, either overnight fees or no-show fees, decreases campsite no-shows.

“I think we’ve all probably had this experience,” says Jon Hughes, a University of Colorado Boulder associate professor of economics and Renewable and Sustainable Energy Institute fellow. “You show up and the campground is half empty, and you think, ‘How is this possible? It was so hard to get this reservation.’

“I think part of it is it’s hard to know what our schedule’s going to look like in six months, so we make these reservations and optimistically tell ourselves we’ll be able to go camping—even up to the last minute.”

Based on his experiences as an outdoor recreator seeing no-shows firsthand and as an economics researcher who has long studied transportation and climate issues, Hughes wondered: How do park pricing policies contribute to no-shows—and the associated inefficiencies—and can policy changes correct these inefficiencies while meeting park managers’ goals of adequate revenue and improved access?

In research recently published in the Journal of Environmental Economics and Management, Hughes aimed to answer these questions via numerical modeling, simulating pricing policies at a hypothetical but representative national park. He found, among other results, that increasing fees, either overnight fees or no-show fees, decreases no-shows, which on one hand is a positive outcome but doesn’t address the perennial issue of equitable access to public lands.

“One of the things park managers are always really worried about is equity,” Hughes says. “This is all of our land—this isn’t only for rich people. If you want to design a system where every site is used and sites go to people who most want to camp, you could just auction (reservations) off. In economic terms, that would be very efficient, but if you think your desire to camp is maybe positively correlated with income or wealth, it might create a system where certain folks are able to camp and others aren’t.”

The economics of no-shows

In part because of his own experiences trying to get a summertime campground reservation, and based on his previous research studying access to and use of public lands, Hughes began considering how to understand the economic impact of campground no-shows: “We have finite capacity (on these lands), so how we best use these resources I think is a really interesting question.”

He consulted with Montana State University Professor Will Rice, a former park ranger, whose research on management of public lands inspired Hughes to call him—a conversation that highlighted the growing problem of no-shows.

“I got off the phone with him and wrote down a simple, intermediate microeconomics model for how consumers would think about this decision (to cancel or no-show),” Hughes says. “There’s some desire to go camping, some understood utility you’d get from having a campground reservation and you pay some monetary fee to take that reservation, but then there’s some uncertainty.

“If you don’t go, you might have to pay a fee or you might have to pay with your time if you decide to cancel. If you can’t go, you think about, ‘How do I minimize the cost?’ That lends itself to a really simple economic model that generates some interesting predictions: If you make it more costly to cancel, people aren’t going to cancel and you’ll have more no-shows. If you charge a fee when people don’t show up, they’re less likely to no-show. The theory model predicts that raising (reservation) fees will discourage no-shows, but it actually leads to another effect where if you increase fees, that just makes it more expensive for everyone, whether they camp or no-show.”

“When I decide to no-show, I’m robbing you of the benefit of camping. My decision negatively impacts you, so how do we ensure that people who want to enjoy public lands are able to?” says ��Ҵ�ý�ƽ�� economist Jon Hughes. (Photo: Dave Hoefler/Unsplash)

Through numerical modeling, Hughes found that cancellation fees can increase or decrease no-shows when campground capacity constraints are not binding, but they strictly increase no-shows when capacity constraints are binding. Further, he found that increasing trip prices strictly decreases no-shows and that increasing no-show fees strictly decreases no-shows.

Simulating a $40 increase in reservation fees or no-show fees, he found that higher reservation prices could increase park revenue by as much as 56% but reduce consumer surplus. However, a $40 no-show fee might modestly increase park revenue but increase consumer surplus by as much as 12%.

Further, he notes in the paper, a $40 increase in reservation price increases the mean income of reservation holders by $2,900, or 2%, while a $40 increase in no-show fee causes little change in income. This could mean that no-show fees wouldn’t push access to public lands further out of reach for those in less wealthy income brackets.

He also estimated outcomes under an optimal no-show fee of $150—equal to the marginal external cost of a no-show, or the lost consumer surplus of a user denied a reservation—which eliminates no-shows and increases consumer surplus by 14%. But even the more modest $40 fee captures nearly all of the benefit of the optimal fee, Hughes found.

Enjoying public lands

All of this, of course, leads to the question of how to collect no-show fees.

“Your doctor is going to charge you if don’t show up, your car mechanic will charge you if don’t show up, my barber will charge me if I don’t show up,” Hughes says. “Logistically, charging a no-show fee is one of the challenges in managing public lands. The only places where it’s currently possible are staffed campgrounds, because hosts are there seeing who hasn’t shown up, but oftentimes a host doesn’t want to cause problems.

“I think technology can save us here. Recreation.gov has implemented an app with the added benefit of your phone knowing where it is all the time, or there are some areas now where you use geofencing. If you want to do the Wave at Coyote Buttes in Arizona, you can get a permit a day or two before your trip, but you have to be within a certain geographic area to get it. It might be possible to do the same with no-shows: You reserved this site, you go, your phone knows if you were there. This is a problem that’s solvable with technology.”

These findings, which Hughes will present to a group of economists with the U.S. Department of the Interior next month, solve two problems, he says: how to best optimize the limited capacity of America’s public lands, which are increasingly in demand, and how to address a “negative externality.”

“When I decide to no-show, I’m robbing you of the benefit of camping,” Hughes explains. “My decision negatively impacts you, so how do we ensure that people who want to enjoy public lands are able to?”

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Competitive electricity markets help clean up the U.S. energy sector

Rachel Sauer — Mon, 28 Jul 2025 13:30:00 +0000

Competitive electricity markets help clean up the U.S. energy sector Rachel Sauer Mon, 07/28/2025 - 07:30

Sarah Kuta

��Ҵ�ý�ƽ�� economics researcher Daniel Kaffine finds that whole electricity markets might help reduce carbon emissions

Even though we use it every day, most of us don’t give much thought to the electricity powering our homes, schools and offices. As long as the lights come on when we flip the switch, we don’t stop to consider where our power comes from, who produces it and how.

Yet, in recent decades, electricity markets—the way power gets bought and sold—have changed dramatically in many parts of the United States. These shifts have largely been good for consumers, promoting competition that often leads to lower electricity bills. But Daniel Kaffine, a University of Colorado Boulder economics professor, wanted to investigate another, less-obvious ripple effect: How are these shifts affecting the environment?

It’s a commonly held belief that competitive markets tend to be bad for the environment. But Kaffine finds the opposite to be true. His latest research, published in The Energy Journal, suggests that competitive whole electricity markets might help clean up the U.S. energy sector by reducing carbon emissions.

Daniel Kaffine, a ��Ҵ�ý�ƽ�� professor of economics, finds in recently published research that competitive whole electricity markets might help clean up the U.S. energy sector by reducing carbon emissions.

“The conventional wisdom on a lot of these topics is not always correct, and environmental economics is a very useful structure and framework for developing more nuanced thinking about the relationship between the economy and the environment,” he says.

Understanding U.S. electricity markets

Before the 1990s, electricity in the United States primarily came from vertically integrated utilities—that is, one company that owned and operated the entire electricity supply chain. These one-stop-shop firms handled every phase of the process, from generating electricity at power plants to transmitting it to substations to distributing it to customers. Overseen by public utility commissions, these companies usually had the exclusive rights to serve a particular region.

However, in 1996, the Federal Energy Regulatory Commission issued two orders that transformed the nation’s electricity utility industry. The commission sought to break up public utilities and get more players into the mix, in hopes of lowering prices for consumers.

As a result, many states began moving away from the traditional utility model and toward competitive wholesale electricity markets. In regions that have made this shift, there are multiple sellers (companies that produce power) and multiple buyers (local utilities that provide electricity to customers).

For the new paper, Kaffine and co-author Doyoung Park, a former ��Ҵ�ý�ƽ�� graduate student who is now an assistant professor of agricultural economics at Texas A&M University, turned their attention to one such market.

They looked at the Southwest Power Pool, an independent system operator and regional transmission organization that manages the grid for some or all parts of 14 states. These are Arkansas, Iowa, Kansas, Louisiana, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming.

The Southwest Power Pool is a bit like an air traffic controller. It doesn’t own any of the region’s electricity infrastructure—things like power lines and poles—but it does operate them. It coordinates the flow of electricity, monitors congestion and prevents outages and emergencies.

Another big role the Southwest Power Pool plays is that of auctioneer, Kaffine says. Each day, it is in charge of sourcing enough power to meet the region’s anticipated demand for the following day. This is what’s known as the “day-ahead energy market,” and it functions like an auction.

“You have buyers and sellers of power,” Kaffine says. “The people who sell power offer up a certain amount of electricity at a certain price. And, basically, the cheapest bids win. Those are the power plants that end up producing power the next day.”

��Ҵ�ý�ƽ�� researcher Daniel Kaffine and colleague Doyoung Park studied carbon emissions from power plants within the Southwest Power Pool before and after the introduction of day-ahead markets. They compared the emissions intensity, or the amount of carbon dioxide emitted per unit of power generated.

(The Southwest Power Pool also runs real-time markets every five minutes. But, for their study, Kaffine and Park focused only on the day-ahead markets, which were created in 2014.)

Consumers are not involved in this process, which runs seamlessly in the background to produce a continuous stream of on-demand electricity. But, because of the competition between sellers, they do end up paying lower electricity bills every month. And, according to Kaffine’s research, society as a whole gets the benefit of reduced carbon emissions.

Carbon emissions decline in free markets

For the study, Kaffine and Park looked at carbon emissions from power plants within the Southwest Power Pool before and after the introduction of day-ahead markets. They compared the emissions intensity, or the amount of carbon dioxide emitted per unit of power generated.

To isolate the effects of the day-ahead markets and rule out other variables, they also compared the data to a similar power pool in Pennsylvania, New Jersey and Maryland, called PJM Interconnection.

When they crunched the numbers, the researchers found that the day-ahead markets caused a 4 percent drop in average carbon emissions intensity in the Southwest Power Pool. That equates to a reduction of roughly 7.66 million tons of carbon dioxide emissions and about $383.4 million in avoided damages per year.

“Shaving off 4 percent from every unit of power that gets generated really adds up,” Kaffine says.

When they drilled down into the data, Kaffine and Park were able to uncover the mechanisms responsible for the decrease in carbon emissions. Some individual power plants got slightly cleaner after the day-ahead markets were introduced. But the primary factor was the retirement of older, dirtier, costlier power plants in the region.

These plants simply couldn’t compete in the new environment, says Kaffine. When they shut down, what remained was a fleet of newer, cleaner and cheaper-to-run facilities—and that resulted in lower carbon emissions overall.

“It’s just like if you have an old air conditioner—it takes more power to run the thing, and that’s expensive,” he says. “In a power plant, if you have an old boiler, it takes more fuel input to produce power and that’s more expensive and dirtier.”

Looking ahead

“You have buyers and sellers of power. The people who sell power offer up a certain amount of electricity at a certain price. And, basically, the cheapest bids win. Those are the power plants that end up producing power the next day.”

Zooming out, the results challenge the long-held assumption that competitive markets are always detrimental to the environment. The findings might be different in other regions but, at least in the case of the Southwest Power Pool, the “market incentives lined up nicely with the environmental incentives,” Kaffine says.

In addition, the findings suggest that other states may want to consider creating or joining competitive electricity markets—for the economic advantages, but also for the potential environmental benefits. Many states in the Southeast and the West (with the exception of California) do not have competitive electricity markets.

Colorado, for example, still operates under the traditional, vertically integrated utility model. But a 2021 state law requires all non-municipal electric utilities that own transmission lines to join a wholesale electric market by 2030.

A study conducted by the Colorado Public Utilities Commission estimates this change could result in savings of up to $230 million each year. And Kaffine’s research suggests it may also lead to a reduction in carbon emissions, too.

“Rather than running an old, dirty plant here in Colorado, having a wholesale market might mean buying cheap wind [power] or cheap natural gas [power] from New Mexico,” says Kaffine. “They do some of that trading already, but having a market in place to facilitate that trade makes it easier to find lower-cost producers. And if the lower-cost producers happen to be cleaner, that’s a win for the environment as well as consumers.”

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��Ҵ�ý�ƽ�� economics researcher Daniel Kaffine finds that whole electricity markets might help reduce carbon emissions.

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Picturing climate change in the West

Rachel Sauer — Wed, 02 Apr 2025 20:57:22 +0000

Picturing climate change in the West Rachel Sauer Wed, 04/02/2025 - 14:57

Rachel Sauer

What began as a hobby for ��Ҵ�ý�ƽ�� economics undergrad Lucas Gauthier came together as a photographic portfolio documenting the already-evident and potential effects of climate change

Lucas Gauthier and his family moved to Colorado when he was in 6th grade, and after a decade of fairly frequent moves—both parents were in the military—this is where everything made sense: mountains for climbing, runs for skiing, trails for hiking and rivers for rafting.

They took some convincing, but eventually his parents let him venture out on his own—forays that grew longer and longer and took him farther and farther into the Colorado wilderness.

Lucas Gauthier, a senior majoring in economics, has photographically documented his adventures in western landscapes since he was in high school.

��Ҵ�ý�ƽ�� four or five years ago, he began taking pictures along the way, usually on his phone. The photography wasn’t the point, necessarily, “but I found that, especially in Colorado, hiking puts you in some very beautiful places,” he explains. “I hike, and the pictures happen while I’m hiking.”

A through line for what had become a large portfolio of photographs emerged in spring 2024. Gauthier, a senior majoring in economics with a focus on natural resource management, was taking ENLP 3100—Complex Leadership Challenges, a class that requires students to complete three projects during the semester.

The first two projects were more technically focused, but the third emphasized creating something of personal value. So, Gauthier thought about all the places in Colorado that he loves, scrolling through both his memories and his photos. He realized that what began as an almost offhanded hobby was actually documenting places that would be or already were altered by climate change.

From that realization was born Climate Change in the West: A Photographic Journal, a multimedia project that incorporates not only data about things like wildfire, heat wave and drought risk and their potential for significant economic impact, but makes it personal with the scenes of incomparable beauty he has witnessed and documented.

“My interest in water specifically came from my interest in hiking and skiing and an interest in all outdoor sports,” Gauthier says. “When people say there’s going to be less rain, less precipitation, that’s a big deal for me.

“I worked and lived in Breckenridge, which is a tourism-dependent area, so if there’s not enough water, that’s weeks of ski season that are lost, and there might not be a rafting season, so that’s where you start to see the overlaps between how climate change is affecting natural systems and the actual economic impacts on livelihoods.”

Capturing what he sees

“My interest in photography has been in capturing this broad swath of environments that we get to play in—as a way to memorialize the experience for myself, and also to share it with others,” Gauthier says.

He took two photography classes in high school, neither of which focused on outdoor or landscape photography, “but I do think those gave me a good idea for how to compose photos and set them up, how to look for different lighting and visual elements,” he says. “They got me in the mindset of thinking, ‘This is something that strikes me, and I’ll see if I can frame it in way that works with what I want to capture.’”

Gauthier was also in high school when he began tackling ever-more-ambitious climbs and started working his way through Colorado’s 58 fourteeners, a goal he completed over the summer. Of those 58, he climbed at least 45 solo.

“(Climbing solo) is kind of a mix of preference and necessity,” Gauthier explains. “It’s easier when the only person you have to plan for logistically is yourself. And when you’re trying to beat lighting and thunder, it’s best to move light and fast.”

However, he never moves so fast that he can’t look around and, if he’s able, to capture what he’s seeing in a photograph. And he returns to certain favorite places, enough that he can compare them season by season or year by year.

“We’ve had a mix of good and bad snow years, but it’s been very noticeable when a particular area that usually has good (snow) coverage into May or June has already melted,” he says. “And there have been times when I’ve hiked through area and a few years later it’s a burn scar, which is a very visceral sense of change in the environment.

“Then there are little things like aspens are yellowing at a different date, wildflowers are blooming and stop blooming at different times. While it’s not as black and white a change, moving those transition points is definitely something that adds up in aggregate.”

Factors of climate change

Now, as he works his way through Colorado’s 100 highest peaks—he’s summited more than 80—and completes his bachelor’s degree, he still is conceptualizing what it all means. Many climate change models are forecast to take decades—if not centuries—to happen, but Gauthier is already seeing anecdotal evidence of them. What does that mean for how he exists in the outdoors and what he’s going to do after he graduates?

“I feel like there is a lot of doom and gloom, and I definitely feel that, but at the same time I am very much a person who feels like I have to say what I’m going to do about it,” he says. “With my area of emphasis in environmental economics, it’s about acknowledging that we have these issues and asking how we address them through actual, tangible means. For me, that means engaging in actual political and broader social processes. When I’m engaged in something, I feel less powerless.

“I think the main point that I wanted to communicate with this project was emphasizing how each of these different factors of climate change are integrated,” he says. “Fires affect water quality, flooding affects agriculture and all of it impacts places that I and a lot of other people love.”

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What began as a hobby for ��Ҵ�ý�ƽ�� economics undergrad Lucas Gauthier came together as a photographic portfolio documenting the already-evident and potential effects of climate change.

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Exploring selfish incentives for pursuing climate policy

Rachel Sauer — Tue, 14 Jan 2025 01:02:56 +0000

Exploring selfish incentives for pursuing climate policy Rachel Sauer Mon, 01/13/2025 - 18:02

Bradley Worrell

��Ҵ�ý�ƽ�� economist Alessandro Peri makes the case that empowering the young can meaningfully affect climate policy and climate outcomes

The consensus opinion in previous research—that future generations are the major beneficiaries of proactive climate policies—tends to emphasize the importance of intergenerational altruism. However, that perspective largely ignores the idea that selfish incentives of current young and old generations can be an important driver to undertake climate policy, says Alessandro Peri, assistant professor in the University of Colorado Boulder Department of Economics.

Recent studies indicate that peak global warming occurs within a decade of emissions. Thus, current climate policy could benefit young generations later in their lifetimes, says Peri, a macroeconomist whose research focus includes computational and environmental economics.

��Ҵ�ý�ƽ�� economist Alessandro Peri argues that selfish incentives of current young and old generations can be an important driver to undertake climate policy.

Meanwhile, climate policy may benefit the current old generations by reducing the damages associated with climate change and therefore increasing the value of their assets.

In the paper, “Selfish Incentives for Climate Policy: Empower the Young!” recently published in the Journal of the Association of Environmental and Resource Economists, Peri and his two co-authors advanced what they say is the first study to examine the direction and magnitude of the selfish incentives of young and old to undertake climate policy.

In the economic model Peri and his co-authors developed, the younger generation (ranging from infants to those aged 35) and the older generation are both part of solutions addressing the climate crisis. The older generation tends to control most of the world’s physical assets, such as factories, he notes.

“What we found after we analyzed, theoretically and quantitively, this question of selfish incentives for climate policy is that incentives of the younger generation can be an important driver for climate policy to address the challenge of global warming,” says Peri.

Abatement measures related to reduced carbon emissions can affect the asset owners’ wealth and, accordingly, the old generation’s selfish incentives to support or oppose climate policy, but the effect is quantitatively small. Hence, Peri says, the exhortation in the title: “Empower the Young!”

When climate policy is a win-win

To explore the selfish incentives for climate policy, the model Peri and his co-authors developed uses a two-generation overlapping generations model, rather than the more common infinitely lived agent model. Peri says the two-generation structure permits a clear distinction between the two types of self-interest: the younger generation’s concern for its future consumption and the older generation’s desire to protect its wealth.

For the incentives of the current young and old generations to undertake climate policy to be aligned (a win-win situation), climate policy must increase the value of the assets owned by the old generations.

“Think about it like if you own a house in front of a lake,” Peri explains. “You don't really like the lake, but someone else decides to clean the lake. Well, the value of your house close to the lake is going to increase; you’re going to benefit indirectly from the cleaning of the environment on your wealth. The (increase) of this price allows the older generations to engage in climate policy and be happy about climate policy.”

For this to happen, Peri and his co-authors created an economic model that uses endogenous asset prices, relaxing the assumption of fixed asset price adopted by most models in the climate literature.

As wealth is transferred from the older generation to the younger one, for the asset price to increase it has to be the case that current young generations want to save more.

“With the new evidence that has shown that emissions today will have an impact in our lifetime in terms of global warming, we wanted to add our new part … looking at how selfish incentives can help mitigate this great human challenge," says ��Ҵ�ý�ƽ�� researcher Alessandro Peri.

“They (the young) are willing to consume a little bit less today and save for tomorrow, so that they can consume more tomorrow,” as a result of climate policy, Peri says. “And what we show is that for that to happen, it means the young have to have a high elasticity of intertemporal substitution, which is just a fancy way of saying that they are willing to transfer more consumption from today to tomorrow” as a result of the effect of climate policy on the value of consumption over time.

Still, based upon the results of computational research done for the research paper, Peri says he and his co-authors determined that selfish incentives for the younger generation proved more quantitatively important for climate policy than those of the old generation.

Goal to spur further research and discussions

Peri says he hopes the economic model for addressing climate change that he and his co-authors created will complement existing research on economic policy related to climate change, including those that rely on altruistic motivations. He says he does not expect lawmakers to adopt the model as policy, but he hopes the paper will spur further research by economists and prompt discussions among policymakers.

Discussions about combatting climate change are particularly timely now, Peri says, given that in 2024 the temperature of the earth reached 1.5 degrees Celsius hotter than in the pre-industrial era—before heat-trapping fossil fuels began accumulating in the atmosphere. The Paris Climate Accords, signed by representatives for numerous countries in 2016, aims to keep warming below that level when looking over multiple years.

“This is the great challenge we are facing nowadays, with the announcement in 2024 that we reached 1.5 degrees Celsius above pre-industrial times. So, it’s been the hottest year that we’ve observed since the pre-industrial era,” Peri says. “With the new evidence that has shown that emissions today will have an impact in our lifetime in terms of global warming, we wanted to add our new part … looking at how selfish incentives can help mitigate this great human challenge.”

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��Ҵ�ý�ƽ�� economist Alessandro Peri makes the case that empowering the young can meaningfully affect climate policy and climate outcomes.

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He will, he will rock you

Anonymous — Thu, 10 Oct 2024 13:11:59 +0000

He will, he will rock you Anonymous (not verified) Thu, 10/10/2024 - 07:11

Rachel Sauer

Pursuing a passion for music, ��Ҵ�ý�ƽ�� economist Murat Iyigun transforms from recognized expert on economics of the family and economic history to regional rock star with a growing musical reputation

In a low-key pub and grill on a quiet street in Littleton, Colorado, it’s about 10 minutes to 8 on a Saturday night, and the renowned economist seems to be in six places at once.

He’s sound checking his guitar and finalizing plans with the light technician and joking with the singers and ticking through the set list with the drummer and donning a dusky green bomber jacket and wraparound shades.

The dance floor in front of the stage is empty for now, but it won’t be for long. At a little after 8, members of the steadily growing audience put down their forks and drinks to welcome—as they’d been invited, as the musicians had been introduced—the Custom Shop Band.

Murat Iyigun is a professor of economics focusing on the economics of the family and economic history.

A kaleidoscope of colored lights flashes from the rafters toward the stage as lead singers Amy Gray, Mckenna Lee and Abbey Kochevar begin an iconic refrain: stomp-stomp-clap, stomp-stomp-clap.

“Buddy you're a boy, make a big noise, playin' in the street, gonna be a big man someday,” Gray sings, achieving the stratospheric, Mercurian growl and grandeur of the original. “You got mud on your face, you big disgrace, kickin' your can all over the place. Singin'…”

The renowned economist leans toward his mic and joins the immortal chorus: “We will, we will rock you.”

It wasn’t so much a threat as a promise. For the next four hours, minus breaks between sets, the band founded by Murat Iyigun, a University of Colorado Boulder professor of economics and former economist with the Federal Reserve Board in Washington, D.C., would rock everyone there.

And they would rock hard.

‘You should listen to Queen’

The question, then, is how does a scholar and economist widely known for his research on the economics of the family and economic history come to be on a pub-and-grill stage on a Saturday night, slaying licks originally conceived by Brian May?

“Life is funny, isn’t it?” Iyigun admits.

The story starts, as not many rock stories do, in Ankara, Turkey. The son of a Turkish father and a Turkish-American mother, Iyigun grew up during a tumultuous time in Turkey, when older kids might stop him on the street to ask whether he was a leftist or a rightist. Still, he says, he was lucky and maybe even a little sheltered, while some of his older sisters’ friends became victims of the left/right violence.

It was that violence, in fact, that caused his older sister’s university to be shut down for seven months. To continue her chemistry studies, she transferred to The Ohio State University, but not before leaving her LP collection to her younger brother.

“I was about 13, and I was counting the days to when she left in July because I was going to be getting all the LPs,” Iyigun recalls with a laugh. “‘Hotel California’ was huge that summer, and then there was Cat Stevens, ELO. I was totally captivated even though, compared to now, things were so closed for us. Going to the U.S. was like going to Mars. But in terms of music and Western culture, especially among urban secular Turks, we followed everything.

Murat Iyigun was inspired to learn to play the guitar after hearing Queen's album Live Killers. (Photos: The Custom Shop Band)

“Now you can get all the vinyls and they’re easy to come by, but at that time people basically made tapes that everyone shared around. There was all this bootleg stuff that would come from Europe, and someone in Istanbul would press some vinyls, but I was never sure if they had an agreement (with the record labels) or if those were counterfeit.”

At the tender age of 13, Iyigun was more into the mellow side of rock n’ roll. A few years deeper into his teens, however, and he discovered KISS. Visiting family in the United States during the summer of ’78—a time that might be considered the fever-pitch apex of the band’s makeup years—Iyigun acquired all things KISS: T-shirts, posters, tapes, you name it.

It might have been the following summer, he doesn’t remember exactly, that he went camping with friends and met one of the great platonic loves of his teenage years—an older girl who inadvertently changed his life.

“She said, ‘You should listen to Queen, they’re a great band,’” Iyigun recalls. “So, I asked someone to make me a tape of the Live Killers album, and that was it.”

It says something about what happened to him, listening to that album, that he currently has—in a glass case in his Boulder home—a replica of May’s immortal Red Special guitar, signed by May. Iyigun also bought Red Special replicas for both of his daughters.

He heard Live Killers and had to learn to play guitar, is the point. Then he and some of his friends, including an ambassador’s son whose presence allowed them to practice at the Swiss embassy in Ankara, formed a band. Iyigun absolutely loved it, but making it as a rock musician in a Muslim country in the 1980s started to strike him as increasingly impossible.

“I thought, ‘OK, I need to get my act together,’” Iyigun says, so he came to the United States to earn an MBA at Boston University and then a master’s and PhD in economics at Brown University.

His parents had given him a Les Paul guitar when he graduated high school and began studying business administration at Hacettepe University—“in Turkey back then you just didn’t have these instruments, so for my parents I know this was very costly,” he explains—and as a graduate student at Brown he bought an amp and noodled around at home.

The Custom Shop Band includes, left to right, lead guitarist Murat Iyigun; singers Amy Gray, Mckenna Lee and Abbey Kochevar; drummer Kevin Thomas; bassist Elliot Elder; and keyboardist Tone Show. Steve Johnson (not pictured) also is a member of the band. (Photo: The Custom Shop Band)

But then life happened. He was beginning his career, he had a wife and young children, he was working toward tenure, and he just didn’t have time to play, for more than a decade.

Then, about 15 or so years ago, at a time he was hardly ever playing guitar, his daughters and wife gave him the game Guitar Hero for Father’s Day. He played it a bit and realized the game console was an instrument in its own way, so with typical focus “I thought, ‘I need to learn to play it well,’” he says. “It’s nothing like guitar playing, but I thought I could learn to do this, and then I was thinking about how I used to play. And that’s when I brought out my guitar.”

Learning through blues jams

“Once I started to come back to it, I realized some of my fundamentals had gone,” Iyigun says. “So, I started by taking these baby steps. I immediately hooked up with a great music teacher, Jeff Sollohub, a Berklee (College of Music) graduate and super nice guy, and every two weeks I’d work with him on a new song, on composition and things like that.

“Within a year or two, I realized I’m only going to get so good if I don’t actually go out and play. By the time I came back to it, there were so many more resources online, YouTube and things like that, and I still got a lot of joy out of playing at home. But I quickly realized there’s a limit to how much I can improve unless I get out and play. That’s when I discovered blues jams, which are the easiest way to go play live even though blues is super difficult to play well.”

He went to multiple blues jams a month around metro Denver and endured the “painful, painful learning process.” A significant moment of clarity and focus came when he saw the parallels between being onstage playing and lecturing in front of a full classroom or at an economics conference.

“I had a lot of embarrassing days where the ride home would be miserable, and I did that for a couple of years, and I was discovering other jams and just kept playing,” he says. “The limitation of blues jams, though, is you pack all the gear, get in the car, drive 40 minutes, get on the list, then the person running the jam will put these bands together and you play for 20 minutes. So, I drove there an hour, waited an hour, spent this time to play 20 minutes—and 18 minutes of that was painful.

“But after doing that a couple years, this blues band of three guys needed a guitar player, and they’d seen me play, so they said, ‘Do you want to join a band?’ I joined for about a year, and there was this point where I’m like, ‘Yeah, this is what I want.’”

Inside, though, he was still the kid obsessed with KISS and Queen who knew all the guitar greats, not just the blues ones. He was treasurer for Mile High Blues Society, but he wanted to play rock.

Joining the band

The Custom Shop Band—the name is a reference to the custom guitars Iyigun plays—came together in a way that could be interpreted as either patchwork or destiny: friends of friends, acquaintances who know a guy, calls and emails that began with, “Hey, are you interested in being in a band?”

Elliot Elder, the Custom Shop Band bass player and a 2022 ��Ҵ�ý�ƽ�� graduate in jazz bass performance, was recommended by a mutual friend. Amy Gray, the original in what is now a trio of lead singers, was recommended to Iyigun by another mutual friend:

“I was singing with another band and had recently left them when I got a message from Murat,” Gray says. “He saw me in a video from that band, and he said they were looking for someone to do backups and fill in when their lead at the time was not available.

“So, I looked them up, I went to a show to see what they sounded like and saw that they played some fun songs, that they as instrumentalists all sounded good, so I thought, ‘Why not, let’s give it a chance, they all seem very nice’ and I jumped in and went with it.”

Murat Iyigun joins in on harmony during the Custom Shop Band's set list of "hits, with a twist."

Gray recruited Kochevar, whom she knew from performing with her in theater, and Lee, who had recently moved to Colorado from California and whom she knew through mutual friends. And that’s how the Custom Shop Band has worked: Iyigun founded it and continues to act as band leader and manager, but in every other way it’s a democracy.

“Murat is an awesome band leader,” Elder says. “One of the reasons why a lot of bands don’t get past a certain point, in my opinion, is the band leader doesn’t have the flexibility and communication skills to manage situations where lineups change, things change on short notice, people have different ideas about how a song should be played. Murat’s emailing venues, scheduling gigs, managing lineups and all the while teaching at CU. He puts a lot of work into it. You meet a lot of people in the music scene who don’t communicate, who don’t get details to people on time, but Murat is definitely an exception.”

The band, which also includes Kevin Thomas on drums and either Tone Show or Steve Johnson on guitar and keyboards, practices in-person when adding a new song to the set list or a new musician, but otherwise its members practice at home with versions of the songs that Iyigun sends to everyone. In keeping with the band’s democratic ethos, every member brings song suggestions to the table.

At any given show, the Custom Shop Band may open with Queen’s “We Will Rock You,” and soon thereafter play “Flowers” by Miley Cyrus and “It’s Raining Men” by The Weather Girls, which might be followed by a mashup of Foreigner’s “Jukebox Hero” and Led Zeppelin’s “Whole Lotta Love.”

On a Saturday night in September, at a pub and grill on a quiet street in Littleton, “So What” by P!nk gets booties to the dance floor in a joyful melee. A dude to the left is lost in his own world of intricate air guitar and a lady on the right has divested herself of shoes. A little later, as the band plays Cheap Trick’s “I Want You to Want Me,” the air guitarist to the left reaches a fever pitch as the band’s lead guitarist, who also happens to be a renowned economist, absolutely wails on the solo.

And transitioning smoothly into Sweet’s “Ballroom Blitz,” the dancefloor still throbbing, the economist is grinning wide.

He will rock you.

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New research quantifies effects of lynchings of Mexicans and Mexican Americans on the wider community

Anonymous — Fri, 20 Sep 2024 15:00:47 +0000

New research quantifies effects of lynchings of Mexicans and Mexican Americans on the wider community Anonymous (not verified) Fri, 09/20/2024 - 09:00

Bradley Worrell

Study by economists is thought to be the first to quantitively estimate the effects of racial terror against Mexicans in the U.S. on U.S.-born Mexican Americans

The racially motivated lynchings of African Americans in the U.S. South are well documented, but much less well known are the racially motivated lynchings of Mexicans and Mexican Americans from 1880 to 1930 in Texas—the state with the highest rate of lynchings of Mexicans on record.

One estimate by researchers for that period puts the lynchings of Mexicans at 27.4 individuals per 100,000 population. New research suggests that the violence may have also caused long-run economic and educational harm to children in communities where lynchings occurred.

In their recently published paper, “Examining the Long-Run Impacts of Racial Terror with Data on Historical Lynchings of Mexicans in Texas,” Professor Francisca M. Antman with the University of Colorado Boulder Department of Economics and fellow economist Brian Duncan with the University of Colorado Denver explore the historical lynchings of Mexicans in Texas and their long-term economic impact on U.S.-born Mexican Americans.

By merging U.S. Census records and historical data on lynchings in Texas, the economists determined that Hispanics raised in a Texas county where one or more lynchings occurred when they were a child experienced negative impacts later in life related to their earnings, education levels and home ownership rates in 1940. However, Antman and Duncan acknowledge that the estimated impacts were small and that more research is needed in this area.

Antman says she believes one reason the lynchings of Mexicans and Mexican Americans are not widely known is that these attacks often occurred during times of more generalized violence in Texas, often associated with the Texas War for Independence from Mexico (Texas Revolution, 1835-36), the Mexican-American War (1846-48) and the Mexican Revolution (1910-20), a civil war between rival political factions in Mexico that resulted in violence spilling over onto both sides of the border.

Incursions by Mexican revolutionaries into Texas during the Mexican civil war fanned the flames against ethnic Mexicans in Texas, who were regularly suspected of sympathizing with Mexican revolutionaries, Antman says. The spike in lynchings of Hispanics between 1915 to 1919 corresponds to the period, with most of the lynchings occurring in the Lower Rio Grande Valley of Texas, which borders Mexico, she notes.

Victims of the Bandit War

Earlier historians of the time tended to refer to violence on the border as a “Bandit War” involving Mexican Revolutionaries, Texas Rangers, the U.S. Army and vigilantes. Antman says modern historians tend to view this period through a different lens, one that recognizes that innocent Mexicans and Mexican Americans were victims of violence during this period simply because of their race and ethnicity.

“Lynchings (of Hispanics) were often discounted with the justification of the protection of the Texas territory against this group of people,” Antman says. In some cases, the lynched men were accused of crimes such as murder or horse theft, but generally they had not been formally charged with any crime, she says.

What’s more, law enforcement—most notably the Texas Rangers—carried out some lynchings, which at the time tended to legitimize the extrajudicial killings, she adds.

The fact that newspapers in Texas at the time published accounts of lynchings suggests that the acts were largely known by the populace, Antman says. Researchers at Sam Houston State University in Huntsville, Texas, have collected all of the published articles they could find about lynchings on the website Lynching in Texas, which is the site Antman and Duncan consulted for their research.

Determining long-term impacts

“To our knowledge, this is the first study to quantitively estimate the impacts of racial terror against Mexicans in the U.S. on U.S.-born Mexican Americans,” Antman and Duncan write in their paper.

Mexican workers line up for jobs in pecan orchards in San Antonio, Texas, in 1939. (Photo: Russell Lee/Corbis)

To gauge that impact, the authors took the information about the lynchings of Mexican Americans in Texas counties from the Lynching in Texas website and compared it with individual-level U.S. Census data from 1880 through 1940.

Given that the census data does not include a person’s county of birth, the researchers restricted their sample to U.S.-born Mexican Americans aged 18 to 59 in 1940 who can be linked to a 1930 or earlier census. They further limited their sample to individuals in the 1940 census who were observed in an earlier census at age 17 or younger residing in a Texas county, which the authors for simplicity refer to as the individual’s “county of origin.”

The census data were then matched to the Lynching in Texas data based on county of origin, to identify the number of lynchings in an individual’s county of origin when they were growing up, specifically at ages 0-5, 6-10 and 11-17.

In merging census and lynching data, Antman says she and Duncan wanted to gauge whether the lynchings had any apparent effect on Mexican Americans’ years of schooling, earnings and home ownership, as measured in the 1940 census. Notably, 1940 was the first year in which measures of educational attainment and earnings were collected.

Antman says this research shows that exposure to lynchings in childhood did have negative impacts on long-run outcomes for Mexican Americans, although the magnitudes are small and not always statistically significant. However, restricting the sample to the Lower Rio Grande Valley origin counties generally raises the magnitudes and statistical significance of the estimates, she says.

Given the challenges of measuring lynchings during this period, Antman says results should be interpreted with caution, as a first step in understanding the long-term harm of racial terror in the United States, but she says she hopes the paper will spur additional research.

“Hopefully this paper is just the starting point of future work, and hopefully it encourages researchers to explore other areas of the U.S. in which we know this kind of racial violence occurred, and the impacts on additional groups of people.”

Top image: Mexican young women working on a farm in Edinburg, Texas, in Feb. 1939. (Photo: Russell Lee/Corbis)

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Study by economists is thought to be the first to quantitively estimate the effects of racial terror against Mexicans in the U.S. on U.S.-born Mexican Americans.

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Free bus fare didn’t yield better air

Anonymous — Mon, 29 Jul 2024 06:00:00 +0000

Free bus fare didn’t yield better air Anonymous (not verified) Mon, 07/29/2024 - 00:00

Sarah Kuta

New research by ��Ҵ�ý�ƽ�� PhD student Grant Webster finds that the free-fare public transit initiative didn’t reduce ground-level ozone, but may have other benefits

Grant Webster is a big fan of public transit—he takes the bus multiple times a week from his home in east Boulder to the ��Ҵ�ý�ƽ�� campus, where he’s working on a PhD in economics.

So, two years ago, when he heard about Colorado’s new “Zero Fare for Better Air” campaign, he was intrigued.

The premise was simple: During the month of August 2022, the state’s Regional Transportation District (RTD) waived fares for all bus and train rides. With this free perk, state leaders hoped to encourage Coloradans to leave their cars at home and take public transit instead. They expected this incentive to reduce ground-level pollution during peak ozone season.

��Ҵ�ý�ƽ�� economics researcher and PhD student Grant Webster found that the "Zero Fare for Better Air” public transportation campaign did not significantly reduce ozone pollution in Colorado.

As a bus rider, Webster was optimistic, too. But as an economist, he wanted to see the data.

“When they came out with this policy, I was like, ‘Hey, I ride the bus, I think that’s a cool idea,’” he says. “But I was also curious. Has anybody studied whether these policies actually work?”

Now, he has an answer to that question. “Zero Fare for Better Air” did not significantly reduce ozone pollution in Colorado, Webster reports in a new paper published in the journal Transportation Research Part A: Policy and Practice.

Using air pollution, weather, ridership and traffic data, Webster found that public transit ridership did increase during the month of free fares—by roughly 15% to 20%. But even though bus and train travel got a boost, car traffic volumes stayed roughly the same.

“The increase in ridership doesn’t seem to be reducing the number of cars on the roads,” he says. “It might just be transit users taking more rides, or people using RTD that weren’t going to take the ride to begin with.”

Informing policy

Roughly 2% of commuters in the Denver metro area use public transit as their main daily form of transportation—and the proportion is likely even smaller in other parts of the state. So, while public transit ridership saw a sizable bump percentagewise, this bump wasn’t enough to reduce ozone pollution.

For Colorado to see a 1% decrease in ozone pollution, public transit ridership would need to increase by 74% to 192%, Webster finds.

“Even if we had this big increase in ridership, it’s still such a small proportion of commuters, in terms of total pollution contributors, that we wouldn’t expect a huge decrease in ozone pollution overall,” he says.

“The transit infrastructure, the whole environment we live in here in Colorado … people are really reliant on their cars. You’d need a much bigger switch of people’s transit behaviors for this policy to be affecting overall air pollution.”

The findings are a bit of a bummer, but Webster says they’re important nonetheless. They could help policymakers use their limited dollars in different ways—ones that might be more effective at reducing pollution.

The “Zero Fare for Better Air” campaign was funded by Colorado Senate Bill 22-180 and brought back in 2023, but axed in 2024 due to cited budget constraints.

The “Zero Fare for Better Air” campaign was funded by Colorado Senate Bill 22-180 and offered in partnership with the Colorado Energy Office. RTD brought back the campaign for a second year in 2023 and expanded it to include both July and August, while Webster’s research was still underway. But, in 2024, it axed the program, citing state budget constraints.

Webster also points out that, while the campaign didn’t reduce ozone pollution as intended, it may have had other economic benefits, such as making public transit more affordable for low-income individuals or introducing new riders to the system.

Also, his findings only apply to Colorado, where overall ridership is relatively low. The picture might look very different in cities and states with more robust transit infrastructure and a higher proportion of public transit commuters, he adds. So, policymakers elsewhere shouldn’t completely rule out similar initiatives in their locales.

“In places like New York City or Washington, D.C., this type of policy might have completely different implications,” he says.

Consider other incentives

Overall, the findings suggest that, when deciding whether to drive or take public transit, the cost of the fare is not the most important factor in commuters’ decision-making process. And that’s an important takeaway: To change commuters’ behavior, policymakers may need to consider other, more compelling incentives.

You’d need a much bigger switch of people’s transit behaviors for this policy to be affecting overall air pollution.”

“When you talk about getting to work, there are so many factors at play,” Webster says. “What’s traffic going to be like? How far away is the bus station? How long do I have to wait? Can I leave in the middle of the day to go run an errand?”

More broadly, as policymakers look for novel ways to slow or halt human-caused climate change, the study also demonstrates the value of considering possible solutions through an economic lens.

“Economics provides a lot of good tools for studying these types of environmental policies,” Webster says. “Can we incentivize people to change their behavior and, as a result, change an environmental outcome? It’s a super important time to focus on the environment and our human impacts on it. And economics can play a role in studying these issues.”

Top image: Riders board a city bus in Denver. (Photo: RTD)

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New research by ��Ҵ�ý�ƽ�� PhD student Grant Webster finds that the free-fare public transit initiative didn’t reduce ground-level ozone, but may have other benefits.

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For some women, STEM may not be the great equalizer

Anonymous — Mon, 17 Jun 2024 06:00:00 +0000

For some women, STEM may not be the great equalizer Anonymous (not verified) Mon, 06/17/2024 - 00:00

Chris Quirk

In newly published book, CU economics alumna Susan Averett analyzes whether STEM fields offer an equal path to prosperity for all women

When Susan Averett began her study of economics as an undergraduate, she recalls that the prevailing credo in the discipline was to adhere closely to the analysis of production, consumption and related topics.

That changed when she arrived at the University of Colorado Boulder to begin work on her PhD in economics. “I got really interested in the economics of gender, and (former faculty member) Elizabeth Peters, a true mentor in every sense of the word, was absolutely instrumental in that,” Averett says.

Peters taught courses in labor economics and economic demography that expanded Averett’s thinking. “It made me understand that economics can be used to look at questions like fertility, marriage and discrimination—things outside the purview of mainstream economics.”

��Ҵ�ý�ƽ�� economics alumna Susan Averett researches the economics of gender, with a focus on labor and health economics and gender outcomes.

What she learned about economics at ��Ҵ�ý�ƽ�� informed Disparate Measures: The Intersectional Economics of Women in STEM Work, her recently released book written with Mary Armstrong.

Averett, now the Charles A. Dana Professor of Economics at Lafayette College in Pennsylvania, has gone on to become a renowned scholar in the field of economic demography, which looks at how economic factors affect various groups of people in society. Her work to date encompasses labor and health economics, with a focus on gender outcomes.

In Disparate Measures, Averett and Armstrong analyze how different groups of women have fared in STEM fields, and whether the presumption that STEM jobs broadly present a pathway to prosperity holds up.

Well-documented pay gap

The pay gap between women and men in the workplace is well documented, Averett notes. A Pew Research Center report last year found that white women earned 83% of what white men earned, and Black and Hispanic women earned far less. And while the report stated that the proportion of women in managerial positions in STEM fields was on the rise, they are nowhere near parity with men.

Averett says the idea for the book was to analyze exactly how much women had benefitted from STEM employment—sometimes called the STEM premium—and to do it in a granular way, looking at subgroups of women to identify differences in outcomes for women in varied demographics.

“The idea is that STEM is being sold as this great equalizer for women, good for innovation and good for the economy,” Averett says. “We took a different tack, and asked what actually happens once women are in the workforce.”

In the book, Averett and Armstrong, whose field is women and gender studies, worked from the massive trove of economic and demographic data in the American Community Survey, which the U.S. Census Bureau generates from questionnaires sent to a large sample of households.

Disparate Measures analyzes how different groups of women have fared in STEM fields, and whether the presumption that STEM jobs broadly present a pathway to prosperity holds up.

Averett and her colleague wrote eight case studies on different subgroups of women, four on more standard demographics (Black women, American Indian and Alaska Native women, Asian and Pacific Islander women and Hispanic/Latina women), and four on groups of women not often separated out in studies of this kind (foreign-born women, women with disabilities, Queer women, and mothers).

The approach is what Averett calls an economic analysis of the population groups in an intersectional way, meaning that the study takes into account that people belong to more than one demographic group at the same time, such as women who are Black, or a men who have a disability.

“Everybody has different identities, and the idea was to make groups that have been invisible, visible,” Averett explains. “For example, with Black women, we looked at foreign-born Black women versus native-born Black women. With Asian women, we separate out Pacific Islander from AAPI, because they are usually grouped together.”

Inequality in the STEM economy

The results of the analysis are stark. Among Black women, 2.7% work in a STEM field, as opposed to 11% of white men. “In general, Black women as compared to white non-Hispanic men are poorly represented in the fields of engineering and STEM management,” Averett says. “Furthermore, Black women do not have wage parity with white men in any area of STEM work. They earn 75% of white men’s wages in STEM management, 76% in computer or math jobs, 78% in the physical and life sciences and 79% in engineering.”

In STEM-related occupations, such as medical fields, foreign-born Black women earn more than those born in the United States, across the board, she notes.

Averett says she hopes that this granular study will prompt policymakers and those who manage personnel in STEM fields to think equality in STEM. “Our use of an intersectional lens allows us to see that economic inequality is woven into the STEM economy. STEM wage gaps should be part of our thinking about how groups fare in STEM, but a continued focus on the STEM premium distracts from that.”

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In newly published book, CU economics alumna Susan Averett analyzes whether STEM fields offer an equal path to prosperity for all women.

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The U.S. labor market can affect ‘people who are not even here,’ research finds

Anonymous — Mon, 22 Apr 2024 18:47:56 +0000

The U.S. labor market can affect ‘people who are not even here,’ research finds Anonymous (not verified) Mon, 04/22/2024 - 12:47

Daniel Long

A recently published paper co-authored by Brian Cadena finds deep connections between the U.S. and Mexican economies

That the job market in Phoenix can affect a child’s education in Mexico may strain credulity, but it’s nevertheless true, according to a recent paper co-authored by Brian Cadena, a University of Colorado Boulder associate professor of economics.

People from specific regions in Mexico tend to migrate to specific regions in the United States, and when U.S. work dries up in some areas, those migrants tend to return to Mexico, Cadena and his co-authors, María Esther Caballero of American University and Brian K. Kovak of Carnegie Mellon, found.

Their paper, published in the Journal of International Economics in November, explores the U.S. labor market’s influence on the lives of people in Mexico by comparing how neighboring Mexican counties, or “municipios,” fared during the Great Recession.

Brian Cadena, a ��Ҵ�ý�ƽ�� associate professor of economics, and his research colleagues explore the U.S. labor market’s influence on the lives of people in Mexico by comparing how neighboring Mexican counties fared during the Great Recession.

To perform their analysis, Cadena, Caballero and Kovak drew upon data from the Matrícula Consular de Alta Seguridad (MCAS), a governmental organization that issues identity cards to Mexican migrants.

Unlike either the U.S. or Mexican census, MCAS provides in-depth, granular information on migrant workers, specifying the municipios they leave and where in the United States they settle.

MCAS is a treasure trove, says Cadena. But it wasn’t long ago that researchers didn’t know how to use it. Cadena, Caballero and Kovak changed that with another paper they published in 2018, which validated the MCAS data and thereby opened up a whole range of potential research.

“This identity-card data really allowed us to drill down and make tight comparisons between municipios,” says Cadena.

The strength of networks

A key finding that emerged from the MCAS data is that people from the same municipio often move to the same cities and states in the United States. “People follow their networks,” says Cadena. And these networks are so strong that migrants from nearby municipios often end up hundreds of miles apart in the States.

Migrants from the municipio of Dolores Hidalgo, for example, tend to move to Texas, while those from nearby Jaral del Progreso generally relocate to Chicago, California and the Southwest. Same region in Mexico, different time zones in the United States.

The close proximity of the municipios is important for the kind of research Cadena, Caballero and Kovak are doing, Cadena explains, because it cuts down on confounding variables. Neighboring municipios experience the same weather, suffer the same droughts, follow the same or similar laws, etc., which means differences in their economic outcomes are likely due to something they don’t share—the job market in the cities and states where their migrants moved.

To unearth these differences, Cadena, Caballero and Kovak measured the job-market losses in the U.S. regions linked to each municipio and then compared the economic outcomes in the municipios connected to harder-hit regions to those connected to softer-hit regions.

As it happens, labor demand in Texas survived the Great Recession relatively unscathed, so the municipios of the migrants who ventured there remained stable. The American Southwest, however, suffered some major blows, and so the municipios connected to that region exhibited several changes.

(Un)expected observations

Some of those changes were unsurprising, says Cadena.

“One of the things we’re finding is how connected these two economies are," says ��Ҵ�ý�ƽ�� researcher Brian Cadena of the United States and Mexico. On the one hand, the stark differences in what someone can earn and what the labor market looks like in one country as opposed to the other suggests that we have made the separation between those countries real and meaningful. On the other hand, we are certainly not islands.”

“When work dried up, more immigrants returned to Mexico, and fewer new immigrants came from that source community.” This then led to a fall in remittances, or money transfers from migrant workers to their families back in Mexico.

Yet Cadena, Caballero and Kovak also observed some changes they didn’t expect. One was that more women joined the Mexican workforce.

“This is called the added worker effect,” says Cadena. “When the primary earner of a household”—in this case, the migrant laborer—“loses their job, it’s a common reaction by the household to say, ‘Let’s send someone else to work.’”

Another unexpected change was a drop in school retention. “We found some suggestive evidence that a loss of jobs in the United States reduced investment in schooling in Mexico. We saw more schooling dropout, especially at transition ages, when kids move from one level of schooling to the next,” says Cadena.

Blurred lines and better choices

What do these findings suggest about the perceived separation between these two countries and their economies?

It makes that separation “a little fuzzier,” says Cadena.

“One of the things we’re finding is how connected these two economies are. On the one hand, the stark differences in what someone can earn and what the labor market looks like in one country as opposed to the other suggests that we have made the separation between those countries real and meaningful. On the other hand, we are certainly not islands.”

Realizing this, Cadena believes, could inform policymaking, specifically regarding immigration.

“When we’re thinking about immigration policy—when we’re thinking about all these things that affect the low-wage labor market—we are making policy that has a real and noticeable effect on the lives of people who are not even here,” he says.

“I’m not a politician, but I think that a more holistic sense of all the impacts of the choices we make as a country could help us make better choices.”

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A recently published paper co-authored by Brian Cadena finds deep connections between the U.S. and Mexican economies.

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