My research program focuses on linking environmental services to human behavior using economic theory to develop specific hypotheses describing what can be learned from individual choices occurring over space and time. By developing and applying novel applied econometric techniques to analyze these choices, consistent measures of the tradeoffs people are willing to make to alter environmental services and their surroundings are revealed. My research focuses on applying these techniques to address substantive issues linking land use, water and energy to observed human behavior and choices.
Specifically, my research program focuses on (1) understanding the impact of unconventional shale gas exploration on nearby populations and the environment; (2) valuing urban amenities and modeling land use change; (3) characterizing the impact of harmful algal blooms on peoples’ choices; and (4) measuring the impact of changes in climate and severe weather on peoples’ decision making and wellbeing. To address these issues, I use a number of econometric approaches to uncover preferences for environmental services including reduced form models describing outcomes of human behavior (e.g. prices, wages) and structural models describing human behavior directly (e.g. where to go, what to do).
Unconventional Shale Gas
My research on economic impacts associated with shale gas exploration consists of papers focusing on housing market impacts to nearby residents, changes in behavior as individuals seek to avert potential risks associated with unconventional shale gas exploration and impacts to land use and the environment that arise from shale exploration. A core objective of these research projects is to provide policy relevant information in a timely fashion as Ohio and other states grapple with the rapidly unfolding emergence of unconventional shale gas exploration in local communities. To do this, I have published peer-reviewed research in top field journals in economics, brought economic findings to interdisciplinary audiences through interdisciplinary publications and conducted outreach to policymakers in person, via media and through extension and policy briefs.
To highlight research quality in this area, my paper titled “Is the Shale Boom a Bust for Nearby Residents? Evidence from Housing Values in Pennsylvania” was the first paper to address the potential for residential property price impacts associated with nearby unconventional shale gas exploration. This paper was published in the top field journal in agricultural economics, the American Journal of Agricultural Economics (AJAE), and was awarded honorable mention as best paper. In this paper, we use hedonic valuation methods to document the spatial and temporal extent of negative impacts to nearby homeowners when shale exploration is underway. We find evidence that the extent of losses is limited to nearby homes within 2 miles and generally within 1 year of the commencement of drilling activities.
Additional research in this area has focused on the potential for wider-spread impacts to hosueholds as they seek to avert potential risks from nearby shale activity. My research on bottled water expenditures titled “Unconventional Shale Gas Development, Risk Perceptions, and Averting Behavior: Evidence from Bottled Water Purchases?” published in the Journal of the Association of Environmental and Resource Economists (JAERE) examines changes in behavior that residents in shale areas undertake to avoid perceived water quality risks by purchasing bottled water.. Using household level information on grocery purchases, we find that as shale activity increases in nearby areas, residents increasingly purchase bottled water. This effect is widespread, increases with shale activity and is more pronounced in rural areas reliant on well water sources. The costs we docment in this paper are widespread and previously overlooked by policymakers seeking to design policies ato compensate residents and communitites experiencing negative externalities from the shale gas boom.
Addition research in this area has foucsed on environmental impacts to forests of spatial exploration and intensity patterns, surveys targeting residents in Ohio experiencing shale activity to shed-light ont he causal drivers of negative housing price impacts, and ongoing research on the potential carbon costs of shale activity that accrue due to landuse change.
My research on unconventional shale gas also includes outreach efforts through extension and policy briefs, radio interviews, contributions to news articles, numerous in-person speaking engagements with Ohio Stakeholders and meetings with policymakers.
Gopalakrishnan, S.; Klaiber, H.A. (2014). Is the shale energy boom a bust for nearby residents? Evidence from housing values in Pennsylvania. American Journal of Agricultural Economics, 96 (1), 43-66. https://doi.org/10.1093/ajae/aat065. Honorable mention for best paper.
Wrenn, D.H.; Klaiber, H.A.; Jaenicke, E.C. (2016). Unconventional Shale Gas Development, Risk Perceptions, and Averting Behavior: Evidence from Bottled Water Purchases. Journal of the Association of Environmental and Resource Economists, 3 (4), 779-817. https://doi.org/10.1086/688487. Lead Article.
Klaiber, H.A.; Gopalakrishnan, S.; Hasan, S. (2017). Missing the Forest for the Trees: Balancing Shale Exploration and Conservation Goals through Policy. Conservation Letters, 10 (1), 153-159. https://doi.org/10.1111/conl.12238
Livy, M.; Gopalakrishnan, S.; Klaiber, H.A.; Roe, B. (2018). The Impact of Intensity on Risk Perceptions of Unconventional Shale Gas Development. Journal of Environmental Management, 218, 630-638. https://doi.org/10.1016/j.jenvman.2018.04.026
Urban Amenities and Land Use
This area of my research studies households' valuation of their surroundings by focusing on environmental amenities in urban settings as well as the underlying behaviors of developers and households that jointly determine the urban landscapes we observe. My research in this area targets top research outlets within my discipline mixed with interdisciplinary publications aimed at broadening the reach and impact of my research portfolio.
In research published in the Journal of Applied Econometrics, we combine novel instrumentation strategies developed in the structural housing demand literature to address the endogeneity of housing prices in models of the timing of new housing supply. These prices are equilibrium outcomes of supply and demand and are influenced by a range of potential amenities driving demand. We use a control function married with a duration model of the timing of housin gconstruction to simulate the potential land use patterns that would emerge from targeted policies impacting the costs of development, which are consistent with growth reduction policies and related initiatives to curb development and enhance environmental quality. In ongoing work, we again extend this insight to examine price versus quantity policies and their impacts on the resulting residential density.
In published in Land Economics titled “Maintaining Public Goods: The Capitalized Value of Local Park Renovations” we investigate the causes of the empirical puzzle in the literature that urban parks appear to impart little value to nearby homeowners. We hypothesize that the lack of value found in prior papers is due to the depreciation of park amenities over time. Using a unique dataset on repeat sales linked to the timings of local park renovations we reveal that the typical value of local park features appears to degrade much quicker than the engineering replacement lifespan, particularly for playground structures. This finding sheds further light on the significant heteorgeneity of local open space, moving beyond simply characterizing the nature of the open space itself to include additional aspects of the features and amenities located on publicly provided space.
Additional recent research in this area has focused on the impact of a common water management infrastructure, storm water basins, on nearby homeowner; the capitalized value of urban lakes; impacts of invasive species on housing development patterns near lakes; as well as the importance of coordination of land use policies in shaping urban development patterns.
Klaiber, H.A.; Phaneuf, D.J. (2010). Valuing open space in a residential sorting model of the Twin Cities. Journal of Environmental Economics and Management, 60 (2), 57-77. https://10.1016/j.jeem.2010.05.002
Abbott, J.K.; Klaiber, H.A. (2010). Is all space created equal? Uncovering the relationship between competing land uses in subdivisions. Ecological Economics, 70 (2), 296-307. https://10.1016/j.ecolecon.2010.09.001
Abbott, J.K.; Klaiber, H.A. (2011). An Embarrassment Of Riches: Confronting Omitted Variable Bias And Multiscale Capitalization In Hedonic Price Models. Review of Economics and Statistics, 93 (4), 1331-1342. https://10.1162/REST_a_00134
Abbott, J.K.; Klaiber, H.A. (2013). The value of water as an urban club good: A matching approach to community-provided lakes. Journal of Environmental Economics and Management, 65 (2), 208-224. https://doi.org/10.1016/j.jeem.2012.09.007
Goodenberger, J.S.; Klaiber, H.A. (2016). Evading invasives: How Eurasian watermilfoil affects the development of lake properties. Ecological Economics, 127, 173-184. https://doi.org/10.1016/j.ecolecon.2016.02.015
Livy, M.R.; Klaiber, H.A. (2016). Maintaining public goods: The capitalized value of local park renovations. Land Economics, 92 (1), 96-116. https://doi.org/10.3368/le.92.1.96
Wrenn, D.H.; Klaiber, H.A.; Newburn, D.A. (2017). Confronting Price Endogeneity in a Duration Model of Residential Subdivision Development. Journal of Applied Econometrics, 32 (3), 661-682. https://doi.org/10.1002/jae.2546
Towe, C.A.; Klaiber, H.A.; Wrenn, D.H. (2017). Not my problem: Growth spillovers from uncoordinated land use policy. Land Use Policy, 67, 679-689. https://doi.org/10.1016/j.landusepol.2017.06.019
Irwin, N.B.; Klaiber, H.A.; Irwin, E.G. (2017). Do Stormwater Basins Generate co-Benefits? Evidence from Baltimore County, Maryland. Ecological Economics, 141, 202-212. https://doi.org/10.1016/j.ecolecon.2017.05.030
Harmful Algal Blooms
Water is an important input to the production of environmental services and influences the land use patterns we observe and the choices individuals make. This research area examines demand for water quality with a particular focus on the growing problem of harmful algal blooms (HABs). My research in this area has focused on the role of water quality in influencing housing markets and recreational behavior with a focus on inland lakes in Ohio and Lake Erie. Much of this research is co-authored with current and former graduate students at Ohio State University.
In a paper titled “Bloom and Bust: Toxic Algae’s Impact on Nearby Property Values” published in Ecological Economics, we present the first evidence of the potential magnitude of negative housing price impacts directly attributable to harmful algal blooms. To do this, we estimate hedonic models of property values for inland lakes in Ohio and find that the presence of harmful algal blooms reduces sales values by between 12% and 17%. Across these inland markets, the potential for negative housing price impacts could exceed $150 million dollars.
Examining anglers near Lake Erie in the Journal of Environmental Management we document the extensive margin shifts in angling license purchases that occur during periods of harmful algal blooms in Lake Erie. For local businesses and policymakers, this research provides important evidence of the potential impacts of worsening water conditions over time and serves as a springboard for ongoing work seeking to more fully document recreation impacts of harmful algal blooms.
Wolf, D.; Georgic, W.; Klaiber, H.A. (2017). Reeling in the damages: Harmful algal blooms' impact on Lake Erie's recreational fishing industry. Journal of Environmental Management, 199, 148-157. https://doi.org/10.1016/j.jenvman.2017.05.031
Wolf, D.; Klaiber, H.A. (2017). Bloom and bust: Toxic algae's impact on nearby property values. Ecological Economics, 135, 209-221. https://doi.org/10.1016/j.ecolecon.2016.12.007
Decision-Making, Natural Disasters and Climate Change
As climate change exacerbates weather extremes attention is increasingly focused on the impacts of changes in these extremes and the efforts underway to adapt to these changes. In an editor’s choice article published in the top field journal in environmental economics, the Journal of the Association of Environmental and Resource Economists (JAERE), titled “Climate Change, Migration and Regional Economic Impacts in the U.S.” we examine the potential impact of climate change forecasts on the location decisions of households and the resulting skill-based heterogeneity that arise from changes in labor market conditions across U.S. regions. Linking an empirical location choice model first published in Land Economics with an interregional computable general equilibrium model for the U.S., we show how wage and housing price feedbacks impact migration and result in migration out of the South and Midwest and into other regions.
Focusing on a metro-level scale in another publication in JAERE titled “Some Like it (Less) Hot: Joint Valuation of the Urban Heat Island and Cooling Vegetation in an Arid City,” we examine the extent of housing price impacts associated with temperature extremes in a case-study of Phoenix, Arizona. Using novel applied econometric methods, we untangle the linked influences between mitigating vegetation and urban heat island temperature impacts. This paper extends my earlier research, published in the the Review of Economics and Statistics, by accounting for unobservables across space and time in a novel application of the Hausman-Taylor framework. We find clear and convincing evidence that households positively value reduced nighttime temperatures which are remarkably consistent with independent estimates of the energy costs associated with increased nighttime temperatures.
Finally, in a paper published in the Journal of Environmental Economics and Management (JEEM), we examine the effects of FEMA spending on hurricane induced property losses. In this paper, we address the potential returns, via reduced damages, of spending in ex-ante and ex-post disaster management by FEMA. We show that both types of spending are effective; however, the returns from ex-ante risk reduction significantly outpace those from ex-post spending following disasters. For policymakers, these results highlight the need to further diversity spending as climate change is expected to exacerbate risks of hurricane impacts along the Gulf and Atlantic coasts.
Klaiber, H.A. (2014). Migration and household adaptation to climate: A review of empirical research. Energy Economics, 46, 539-547. https://doi.org/10.1016/j.eneco.2014.04.001
Fan, Q.; Klaiber, H.A.; Fisher-Vanden, K. (2016). Does Extreme Weather Drive Interregional Brain Drain in the U.S.? Evidence from a Sorting Model. Land Economics, 92 (2), 363-388. https://doi.org/10.3368/le.92.2.363
Davlasheridze, M.; Fisher-Vanden, K.; Klaiber, H.A. (2017). The effects of adaptation measures on hurricane induced property losses: Which FEMA investments have the highest returns? Journal of Environmental Economics and Management, 81, 93-114. https://doi.org/10.1016/j.jeem.2016.09.005
Klaiber, H.A.; Abbott, J.K.; Smith, V.K. (2017). Some Like It (Less) Hot: Extracting Trade-Off Measures for Physically Coupled Amenities. Journal of the Association of Environmental and Resource Economists, 4 (4), 1053-1079. https://doi.org/10.1086/692842
Fan, Q.; Fisher-Vanden, K.; Klaiber, H.A. (2018). Climate Change, Migration, and Regional Economic Impacts in the U.S. Journal of the Association of Environmental and Resource Economists, 5 (3), 643-671.