Martin Heintzelman | Clarkson University (original) (raw)

Papers by Martin Heintzelman

Review of International Economics, 2019

Using a model of monopolistic competition, we examine the relationship between intra‐industry tra... more Using a model of monopolistic competition, we examine the relationship between intra‐industry trade and environmental regulation. The decisions on emission standards set by each country show strong strategic interactions. In closed economies regulations act as strategic substitutes, and in equilibrium there is under‐regulation relative to the cooperative outcome. Trade liberalization may lead to stricter or laxer environmental standards, depending on the consumers’ preference for product variety. In addition, we show that with open trade environmental regulations may act as strategic complements and countries may set environmental standards that are as strict (or stricter) than those in the cooperative outcome.

Journal of Environmental Economics and Management, 2018

In the State of New York, atmospheric deposition of mercury ranks among the 10 most prevalent cau... more In the State of New York, atmospheric deposition of mercury ranks among the 10 most prevalent causes of adverse impacts on water quality. This paper examines the impacts of mercury pollution by exploring the relationship between property values and fish consumption advisory (FCA) designation on New York lakes. We find that New York State property values within one mile of an FCA-designated lake decrease by 6e7 percent on average. This negative impact decreases as the distance between properties and lakes increases. Regressions using samples derived with Mahalanobis metric matching find an even larger FCA effect, ranging from 7 to 10 percent. Our results can serve as a partial indication of the benefits of the Mercury and Air Toxics Standards (MATS), which includes the first mercury emission standard in the United States.

Ecological Economics, 2017

Wind energy developments are often controversial. Concerns are often raised about negative impact... more Wind energy developments are often controversial. Concerns are often raised about negative impacts on local communities, including impacts on property values. Some of these negative impacts may be offset by compensatory payments made by wind developers. Community involvement in the planning and development process may also reduce negative perceptions associated with wind facilities. However, if the development is near a border between municipalities, states, or even countries, it is often the case that one or more jurisdictions will not be involved in the process or receive compensation, but will, nonetheless, face some costs or impacts from the development. We explore exactly this situation at the border between Canada and the United States in the Thousand Islands region where a wind farm is currently operating on the Canadian border island of Wolfe Island. Using a parcel-level hedonic analysis of property sales transactions, we find that properties in New York with a view of and/or in close proximity to the turbines significantly depreciated in value after construction of the turbines while no negative impacts were observed on properties in Ontario. We highlight a number of factors that could contribute to these differences in impacts on property values, which may also explain the variation in results that currently exists in the literature.

Agricultural and Resource Economics Review, 2015

Fracking is a controversial practice but is thriving in many areas. We combine a comprehensive da... more Fracking is a controversial practice but is thriving in many areas. We combine a comprehensive data set on local bans and moratoria in the state of New York with local-level census data and spatial characteristics in a spatial econometric analysis of local fracking policies. Some factors, including location in the Utica shale, proportion of registered Democrats, and education level, increase the probability of restrictions on fracking. Extent of local land development, location in highly productive petroleum areas, and number of extant oil and gas wells, are among factors that have a negative impact on the likelihood of a ban or moratorium.

Walsh, Patrick J., Stephen Bird, and Martin D. Heintzelman. 2015. “Understanding Local Regulation of Fracking: A Spatial Econometric Approach.” Agricultural and Resource Economics Review 44 (2): 138–63.

High volume hydraulic fracturing (HVHF, or fracking), the fracturing of underground shale gas dep... more High volume hydraulic fracturing (HVHF, or fracking), the fracturing of underground shale gas deposits to capture natural gas, is a controversial practice, but one that is thriving in many areas of the United States. Thirty home-rule states (and 9 others with “limited” status) in the U.S. retain the ability for local communities to pass laws beyond the minimums established by their state legislature. We use a comprehensive dataset on local bans and endorsements in New York State, together with local-level census data, and spatial characteristics, linked through GIS, to undertake a spatial econometric analysis of local fracking policies. These data allow us to explore the determinants of local regulation allowing (or banning) fracking activities in New York, our test case state. Our analysis suggests that there are several factors which influence whether or not a local municipality implements a ban or moratorium on fracking. Factors which increase the probability of local restrictions on fracking include a community’s presence in the Utica shale region, the relative leaning of the community to the Democratic Party, and the education level of the local population. Alternately, the degree of local land development, location in highly productive areas of the Marcellus, the number of extant oil and gas wells, presence in priority drinking-water watersheds, if the community is an incorporated village (as opposed to town), and the percentage of wetlands all have a negative impact on the likelihood of a ban or moratorium. In addition, we find, in our spatial lag model, that there are significant spillover effects across communities, pointing to the importance of our spatial econometric approach.

Floods cause billions of dollars in property damages each year in the United States. While progra... more Floods cause billions of dollars in property damages each year in the United States. While programs like flood insurance and disaster relief help to lessen the burden on those harmed, they do nothing to mitigate the severity of floods. Wetlands have a natural ability to mitigate the impacts of flooding through the slowing of runoff and absorption of excess rainwater. For this purpose they are inherently valuable. This study implements a hedonic analysis to study the complicated interactions between property values, wetlands, and flood risk using detailed property transaction data in the Hudson River Valley of New York State. We augment this analysis with GIS data including FEMA flood risk maps, the location of wetlands and other land uses, and various geographic layers. We find, as expected, that higher levels of flood risk, as well as the realization of actual flooding events, negatively impact property values. We also find that the presence of wetlands mitigates the negative effect of floods to properties in flood zones, which is likely due to a reduced severity of damages. The magnitudes of these effects suggest that wetlands provide considerable benefits to property owners and the results provide a partial benefit measure for policymakers, especially to state and federal programs, such as the USDA’s wetlands and conservation reserve programs whose primary aim is to preserve and restore these natural buffers.

The Adirondack Park contains over 6 million acres and over 3,000 lakes. Approximately 43% of the... more The Adirondack Park contains over 6 million acres and over 3,000 lakes. Approximately 43% of the Park is publically owned and protected to remain “forever wild”. Despite regulatory measures aimed at protecting the natural resources of the Adirondacks, surface water quality is threatened by acid and mercury deposition. This paper uses data on 14,929 property transactions over 9 years in the 12 counties that comprise the Adirondack Park to explore how property owners value lake water quality using fixed effects hedonic analysis. We find that multiple measures of water quality have significant effects on property values including lake acidity, clarity, and impairment classification. We also find that the presence of loons and fish on the nearest lake positively impacts property values by 8% and 12%, respectively. This research provides valuable insight into the factors that property owners value most, and as interesting, those factors which they do not value. Moreover, this research helps quantify air pollution impacts on Adirondack property values and could be used to justify additional Clean Air Act regulations to further restrict sulfur and mercury emissions that would benefit the Park.

Many communities in the United States have begun enacting policies to preserve open space, often... more Many communities in the United States have begun enacting
policies to preserve open space, often through local voter referenda. New Jersey sponsors such municipal action through the Green Acres Program by providing funding and low interest loans to towns that choose to increase property taxes and spend the money raised on open space preservation for the purposes of conservation and/or recreation. This paper endeavors to understand which factors contribute to the appearance
and success of these measures. Although previous literature has examined this issue, this is the first study to account for spatial
dependence/spatial autocorrelation and to explore dynamic issues through survival analysis. The traditional two stage model from the literature is extended by incorporating a Bayesian spatial probit for the first stage and a maximum-likelihood spatial error model in the second stage. A Cox - proportional hazard model is used to examine the timing of referenda appearance. Spatial dependence is found in the second stage of the analysis, indicating future studies should account for its influence. There is not strong evidence for spatial dependence or correlation in the first stage. The survival model is found to be a useful complement to the traditional probit analysis of the first stage.

Agricultural and Resource Economics Review, Apr 2013

The mix of public and private land ownership within the Adirondack Park often leads to conflict b... more The mix of public and private land ownership within the Adirondack Park often leads to conflict between development and conservation interests. We explore the effects of the Adirondack Park Agency’s classifications on property values through hedonic analysis while simultaneously controlling for environmental and recreational amenities. Results show that lands in the park classified for moderate-intensity use sell at a premium of up to 7 percent while lands in more restrictive classes are discounted. There is also evidence that decreasing the impact of humans by one unit increases property values by approximately 2 percent.

Personnel Review (Forthcoming)

The creation of historic districts has become a common way to preserve historic buildings and nei... more The creation of historic districts has become a common way to preserve historic buildings and neighborhoods. Advocates of historic districts assume that such districts augment, or at least, protect property values for homes within these districts. The existing economic literature supports this conclusion, but most studies seem to fall victim to an endogeneity bias since higher value homes are, all else equal, more likely to be included in districts. This study uses repeat-sales fixed effects (difference-in-differences) analysis to look at homes before and after the creation of districts in the Boston-Cambridge-Quincy MSA between 2000 and 2007, and thus control for this endogeneity bias. Secondarily, we re-examine the effects of a Massachusetts preservation policy, the Community Preservation Act (CPA) which, in part, supports historic preservation. We find evidence that the creation of a local historic district, on average, reduces home prices for homes in that district between 11.6 and 15.5%. This indicates that any restrictions implied by the creation of a district outweigh any benefits to homeowners within the district. If, instead, census block fixed effects are employed, the analysis shows a statistically insignificant impact, the sign and magnitude of which depends on the specification. Taken together with the repeat sales result, this confirms our intuition about the importance of controlling for omitted variables and endogeneity biases. Finally, we find evidence that the CPA also lowers property values, by less than 1%, and that being in a Historic District magnifies the negative effect of the CPA.

… . http://papers. ssrn. com/sol3/papers …, Jan 1, 2011

"The siting of wind facilities is extremely controversial. This paper uses data on 11,331 proper... more "The siting of wind facilities is extremely controversial. This paper
uses data on 11,331 property transactions over 9 years in Northern New York to explore
the effects of new wind facilities on property values. We use a fixed effects framework
to control for omitted variables and endogeneity biases. We find that nearby
wind facilities significantly reduce property values in two of the three counties studied.
These results indicate that existing compensation to local homeowners/communities
may not be sufficient to prevent a loss of property values."

The BE Journal of Economic Analysis & Policy, Jan 1, 2010

In many communities, land-use and open-space preservation have become important concerns. Using a... more In many communities, land-use and open-space preservation have become important concerns.
Using a large dataset containing every home sale in the state of Massachusetts over 8
years, this paper simultaneously measures the impact of the mix of land-uses in the immediate
neighborhood of a home on property values and the impact of a locally-implemented program,
the Community Preservation Act (CPA), which provides funds for local open-space and historic
preservation as well as affordable housing. I exploit the panel nature of the dataset to conduct
a difference-in-differences analysis using local as well as house level fixed effects to overcome
omitted variables bias. My results indicate that, on average, passage of the CPA reduces property
values by about 1.5% in Massachusetts towns. However, when I allow the CPA effect to differ by
county, I find some heterogeneity – it increases property values in some communities and reduces
them in others. Variation in local spending priorities appears to have little impact on property
values or the effect of the CPA. Finally, I find that cropland and pasture, as well as low-density
residential development, are the most preferred local land-uses, and that homes are more expensive
as one increases distance to highways and active rail lines.

The BE Journal of Economic Analysis & …, Jan 1, 2009

In this paper, we analyze the problem faced by impatient researchers attempting to balance the co... more In this paper, we analyze the problem faced by impatient researchers attempting to balance
the considerations of journal quality, submission lags, and acceptance probabilities in choosing
appropriate outlets for their work. We first study the case in which probabilities of submission
outcomes are exogenous parameters and show that authors can find the optimal submission path
through the use of journal ‘scores’ based only on the journals’ characteristics and the author’s degree
of impatience. Then, we analyze a more realistic framework in which acceptance probability
is determined by the quality of the manuscript, in which the reviewing process may be imperfect,
and in which authors may not be certain of the manuscript’s quality. Throughout, we illustrate
our analysis with data on actual economics journals. We also consider the problem of journals
facing a large number of submissions, limited space, and limited resources to review papers and,
in particular, we examine the relative effectiveness of using submission fees and reviewing lags to
ration article submissions.

Land Economics, Jan 1, 2010

This paper examines a Massachusetts policy that encourages communities to raise money through ref... more This paper examines a Massachusetts
policy that encourages communities to raise money
through referenda for preservation and affordable
housing. I use difference-indifferences, fixed effects,
and quantile regression to compare home prices
before and after such referenda in two towns. I
include covariates representing existing land uses,
zoning, and historic resources to estimate the value
of these amenities. Standard regression techniques
indicate weak effects of the referenda, while the
estimated coefficients on land use and historic
preservation confirm that preservation has a positive
effect on property values. The quantile regression
sheds light on some heterogeneity that goes unnoticed
in standard regression results.

Journal of Environmental …, Jan 1, 2009

The common-propertyproblemresultsinexcessivemining,hunting,andextractionof oil andwater.Thesameph... more The common-propertyproblemresultsinexcessivemining,hunting,andextractionof
oil andwater.Thesamephenomenonisalsoresponsibleforexcessiveinvestmentin
R&D andexcessiveoutlaysinrent-seekingcontests.Weproposea‘‘Partnership
Solution’’toeliminateoratleastmitigatetheseexcesses.Eachof N playersjoinsa
partnershipinthefirststageandchooseshiseffortinthesecondstage.Undertherules
of apartnership,eachmembermustpayhisowncostofeffortbutreceivesanequal
shareofthepartnership’srevenue.Theincentivetofree-ridecreatedbysuch
partnershipsturnsouttobebeneficialsinceitnaturallyoffsetstheexcessiveeffort
inherent insuchproblems.Inourtwo-stagegame,thisinstitutionalarrangementcan,
under specifiedcircumstances,inducethesocialoptimuminasubgame-perfect
equilibrium:noonehasaunilateralincentive(1)toswitchtoanotherpartnership(or
create anewpartnership)inthefirststageor(2)todeviatefromsociallyoptimalactions
in thesecondstage.Thegamemayhaveothersubgame-perfectequilibria,buttheone
associatedwiththe‘‘PartnershipSolution’’isstrictlypreferredbyeveryplayer.Wealso
propose amodificationofthefirststagewhichgeneratesauniquesubgame-perfect
equilibrium.Antitrustauthoritiesshouldrecognizethatpartnershipscanhavealess
benignuse.Byorganizingascompetingpartnerships,anindustrycanreducethe
‘‘excessive’’outputofCournotoligopolytothemonopolylevel.Sincenopartnerhasany
incentivetooverproduceinthecurrentperiod,thereisnoneedtodetercheatingwith
threats offuturepunishments.

International Yearbook of …, Jan 1, 2000

The universal theme of deregulation of the electricity industry is the dismantling of the exclusi... more The universal theme of deregulation of the electricity industry is the dismantling of the exclusive
franchise, opening up some segments of the industry to competition. Technological changes in generation
have helped eliminate the perception that generation is a natural monopoly, but this change has not
occurred in transmission and distribution services. Marketing functions have also been opened up to
competition in many places. This paper includes a brief overview of the different approaches to
restructuring that have been adopted in selected countries around the world. It also surveys the existing
literature that explores various aspects of how electricity restructuring is likely to affect the environment.
The effect of restructuring on the environment consists of four constituent influences: (1) changes
in electricity demand and how it substitutes for (and complements) the consumption of other products, (2)
the substitution among fuels and other inputs in electricity production, (3) efficiency improvements that
stem from the introduction of competition, and (4) the interaction of firm behavior and market structure
with existing and new incentive-based approaches to environmental regulation. Notwithstanding the
possibility that electricity consumption displaces the use of other fuels in end uses, most studies find some
negative environmental effect from increased consumption, especially with respect to carbon emissions.
However, the efficiency gains that can be expected in delivering electricity services create the opportunity
for additional environmental controls. Regulatory reform has arrived in the electricity sector, and it is
expected to offer welfare gains that can be shared between economic and environmental objectives.

Journal of risk and …, Jan 1, 2002

Much of the justification for environmental rulemaking rests on estimates of the benefits to soci... more Much of the justification for environmental rulemaking rests on estimates of the benefits to society of reduced mortality rates. This research aims to fill gaps in the literature that estimates the value of a statistical life (VSL) by designing and implementing a contingent valuation study for persons 40 to 75 years of age, and eliciting WTP for reductions in current and future risks of death. Targeting this age range also allows us to examine the impact of age on WTP and, by asking respondents to complete a detailed health questionnaire, to examine the impact of health status on WTP.