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Advancing Economics, Transforming Lives
Spring 2014

In This Issue

Sophomore in National Spotlight

Legacy Costs to Michigan Cities

Outstanding Faculty Award

Alumni News

People and Awards

Masthead

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Department of Agricultural, Food and Resource Economics

Publications

Michigan State University

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From the Chairperson

On Tuesday, April 22, the Board of Trustees approved my appointment as associate provost and dean of International Studies and Programs (ISP). I accepted the ISP interim dean position at the request of Provost June Youatt - a decision driven in no small part by the importance of international programs to the Dept. of Agriculture, Food, and Resource Economics (AFRE). While I initially had no intention of becoming a candidate for the permanent appointment, I am honored at this opportunity to help advance MSU's global reach and shape the university's brand on the world stage.

This new responsibility means that I will soon need to step down as chairperson of the department. My understanding is that Dean Poston, in consultation with the AFRE Department Advisory Committee, will appoint an acting chair, and the department will then begin the formal process of conducting a national search for a permanent chairperson. Dean Poston will be at the May 9 faculty meeting to discuss the transition and process for searching for and selecting a new chair.

I feel fortunate to have been allowed the opportunity to serve as chairperson. Over the last ten years, AFRE has elevated scholarly excellence throughout our programs; enhanced the quality of students' educational experiences; delivered dynamic, high-impact outreach programs to stakeholders; and become more competitive in generating external funding from a diverse set of donors and granting agencies. Through the hard work of faculty, staff and students, we have become a top-ranked department, and we've done it all while staying true to our core values.

I am pleased that I will remain connected to AFRE, especially through our international programs and through bonds of friendship that we have forged over the years.

Steve Hanson

Department Chair

Agricultural, Food and Resource Economics

Liz Brajevich

Sophomore Brajevich in National Spotlight

Liz Brajevich, a sophomore majoring in environmental economics and policy as well as in fisheries and wildlife, has been making headlines this spring. On Feb. 7, she joined President Barack Obama at the signing of the Farm Bill on the MSU campus. In early March, she was named Michigan State University's nominee (MSU) for the Udall Scholarship, awarded to one student per state who aims for a career in policy related to the environment or Native Americans.

A native of Los Angeles, Brajevich learned about MSU through a routine college fair. The honors student says she chose MSU because "the university land grant mission really resonated with me. I love the idea of using it to make a difference in the world after graduation. There's nothing like that in the PAC 12. Here there's a sense of community and how we can work together to have an impact."

Brajevich spent last summer as a legislative affairs intern at the National Fish and Wildlife Foundation in Washington, D.C. She says it was an exciting time for the organization because they were working out how to distribute the settlement money awarded in the BP Deepwater Horizon explosion that dumped millions of gallons of crude oil into the Gulf of Mexico in 2010.

"I worked on cooperative agreement proposals and legislative updates," she says. "But my favorite part was sitting in on meetings and seeing how these agreements are made."

As one of MSU's Demmer Scholars she got to pair her internship in the nation's capital with a special course on natural resource policy making.

While she was in Washington, Congress was reconsidering Farm Bill legislation. Brajevich was disappointed when it did not pass before summer's end. But she was elated to be invited to attend its signing in East Lansing. She sat front and center with other select MSU students as President Obama signed the historic legislation into law on February 7.

This summer, Brajevich will return to Washington for an internship at the Global Environment and Technology Foundation. She will be analyzing water and sanitation issues. Based in Arlington, Va., the GETF is a nonprofit that works to promote sustainable development through partnerships and targeted action.

"I'm so amazed by the access to opportunities here at MSU," says Brajevich. "I love MSU and the support I get from the department in general. It's so hands-on and the professors are so willing to work with you. I'm very sure and happy in my decision to come here."

-- Christine Meyer

Eric Scorsone

Scorsone Measures Legacy Costs to Michigan Cities

"Time is not on Detroit's side," explains Eric Scorsone, as the embattled Motor City slogs its way through a bankruptcy case that recent news reports have indicated might conclude by September.

In his 2013 Michigan State University Extension report, "Funding the Legacy: The Cost of Municipal Workers Retirement Benefits to Michigan Communities (pdf)," Scorsone estimates the price tag for providing health care benefits to Michigan's retired municipal workers will approach a staggering $13 billion over the next 30 years. Michigan municipalities (cities, townships and villages) are not required to reserve money for promised retiree health benefits. As a result, Scorsone says, the debt grows out of control and the governing bodies face the likelihood of higher taxes, reduced services or severed agreements with retirees.

In Detroit, several important decisions and deadlines in the bankruptcy case will be reached this April, including whether or not labor unions and pension plan officials agree to emergency manager Kevin Orr's plan to shrink proposed cuts in payouts to retirees. Those who disagree contend that Michigan's constitution should prevent any cuts to public employee pensions. Orr's original proposal calls for reductions of 6 percent in police and fire pension payments and a 26 percent cut for city workers.

Scorsone, an economist in the MSU Department of Agricultural, Food and Resource Economics and an MSU Extension specialist, presented his report last spring to the Michigan House Committee on Financial Liability Reform. He singled out unfunded post-employment benefits - for example, health care, dental care, life and other insurances - as "a critical public policy issue that is going to threaten local government's ability to provide public services in the future. It's a crisis now and it's only going to get worse."

Scorsone and Nicolette Bateson, a certified public accountant and MSU researcher, reviewed 1,773 Michigan cities, townships and villages and found that 311 offered some form of post-employment health care benefits. While the collective bill of funding those benefits is $12.7 billion, the bulk of it - almost $11 billion - belongs to local governments in a 10-county region of southeastern Michigan including Oakland, Macomb and Wayne counties. The city of Detroit alone will owe $5.5 billion in retiree health care costs. Other cities owing more than $300 million include Flint ($1.1 billion), Lansing ($502 million), Warren ($414 million), Grand Rapids ($325 million) and Saginaw ($311 million).

In his testimony before the House committee, Scorsone asked (and then answered): "Why was Flint put under an emergency financial manager? Why does Detroit face the prospect of being put under an emergency financial manager? Why is the city of Lansing in such financial trouble? It's because of these legacy costs ... (that) are going to consume more and more of the budget."

Historically, municipalities offered retiree benefits as a way to compete for workers against the Big Three automakers and other private employers. Health care benefits also helped municipal workers such as firefighters and police officers who retired in their 50s - long before Medicare kicked in at age 65. Typically, the benefits were written into union contracts.

But municipalities have not been required to fund retiree health care during an employee's tenure. This is different from the pay-as-you-go pension system. Municipalities weren't even required to report retiree health care costs until 2007. Because of the change in reporting, economists such as Scorsone are finally determining the scope of the problem.

Other states face similar problems with unfunded legacy costs, Scorsone noted. Massachusetts, for example, has higher retiree health care bills than Michigan even though it has far fewer people. Ohio and Oregon have begun to prefund the post-employment benefit. Illinois has considered directing its pre-Medicare retirees to the insurance exchange under the Affordable Care Act.

Scorsone said state lawmakers should step in to deal with the problem.

"We believe the Legislature needs to look at policy options, needs to act, because the Legislature has power the local governments do not have," Scorsone said. "Statewide policy makes more sense than each municipality trying to fix this on their own."

--Mark Meyer

Rick Horan

Horan Earns Outstanding Faculty Award

Over a career that has spanned 14 years at Michigan State University, it's fair to say Richard Horan has taken full advantage of his freedom to explore the diverse and relevant topics that interest him to produce an impressive array of research -- on his way to also becoming a highly respected teacher.

Horan's ability to do these two things so successfully for the Department of Agricultural, Food and Resource Economics (AFRE) earned him MSU's William J. Beal Outstanding Faculty Award of 2014 at a ceremony on Feb. 11. Criteria for the award include "exceptional research ... in traditional, nontraditional, or emerging areas." He is the author of 65 articles in leading general science, economics and ecology journals. His publications have garnered close to 2,000 citations from top undergraduate and graduate texts to mainstream media such as The Economist and Forbes.

Horan teaches the undergraduate course Natural Resource Economics (ESA 460) and the graduate level class Advanced Natural Resource Economics (AEC 925). He has a distinguished record of advising graduate students, several of whom have won departmental awards. He also has co-authored numerous published articles with them.

A Pennsylvania native, Horan received his undergraduate degree in math and economics from Appalachian State University. He earned his master's degree and doctorate at Penn State University.

"Rick excels in all areas of his program - scholarly achievement, teaching and mentoring and service - and his skillful and effective integration of these program areas has brought distinction to AFRE and to Michigan State University," according to the nominator's statement submitted by department chair Steve Hanson.

For his part, Horan says he is just grateful that he gets to indulge his love of natural resources, economics and environmental systems through his research. Hanson sums up Horan's work as seeking "to understand how human and environmental systems co-evolve, and how information about human-environmental interactions can be used to construct public policies that correct market failures and move society toward more sustainable outcomes."

Says Horan, "I like to look at topics that are really relevant, like pollution problems, but hopefully in an innovative manner. I attempt to explore problems in ways that no one has done previously. I also enjoy applying economic concepts to topics that are outside the traditional realm of economics, but that have a clear economic linkage."

For example, Horan has studied ways to create a workable incentive system between industry and agriculture for trading pollution permits. This has been tried in other forms for the past three decades without much success, he says. Meanwhile nonpoint source pollution, mainly from farm runoff, remains the leading cause of water quality problems in the United States.

Horan also is involved in two grants to study wildlife and infectious disease problems such as bovine tuberculosis. Again, he has found that the human response can affect everything from taking preventative measures to doing nothing and waiting for compensation. Often those human actions are influenced by government policies or even by what the farmer down the road is doing with his herd.

"We need to understand how human choices can affect these systems and then try to design incentives so people will make biosecurity decisions that will protect their animals from infection," Horan says.

Dr. David Zilberman from the University of California-Berkeley has called Horan "among the top three best resource economists in the world at this stage of his career ... His papers (on the economics of disease) are brilliant technically and insightful and applicable as well."

Horan's interest in how man interacts with his environment stretches all the way back to the evolution of early hominids, including humans and Neanderthals. This area of research, called paleoeconomics, examines the role of economic and ecological feedback processes in this evolution.

"Rick is a pioneer in this relatively new area of research, which bridges several traditionally distinct disciplines such as economics, anthropology and paleoneurology," says MSU professor and AFRE colleague David Schweikhardt.

According to Horan, humans may have survived and Neanderthals went extinct because humans were more adept at interacting and trading for what they needed, spreading the burden of survival over a larger group. Specialization and trade could have improved the ecological efficiency of the group, even if individual humans were on average physically inferior to Neanderthals. Horan also has studied the ways in which trade and other economic choices may have affected the development of speech in humans, as well as the development of the human brain.

Horan admits that his own brain usually contains more ideas to explore than there are hours in a day. But he has no desire to return to government work, which is where he started his career.

His research at MSU is too engaging and "I learn a lot from teaching," he says. "I have to keep up with advances that are outside my areas of research, and the students' questions help me look at things in ways I've never thought about before."

-- Christine Meyer

AFRE Alumni News

2000s
Ben Chaffin (M.S., Agricultural Economics 2006; B.S., Agribusiness Management 2003) received the Michigan Farm Bureau Young Farmer Achievement Award on Dec. 4, 2013. The award recognizes farm management ability and involvement in Farm Bureau and other organizations.

Marcus Coleman (M.S. 2009) was promoted to dean of students at Southern University and A&M College in November 2013, after moving to Southern as interim dean of students in April 2013.

Carrie Volmer-Sanders (M.S. 2006) was awarded as a Champion of Change for Engaging the Next Generation of Conservation Leaders by President Obama on March 18 for her conservation work with farmers in the Lake Erie basin.

2010s
Erin Collier (M.S. expected 2014) has taken the position of markets and trade analyst at FEWS Net in Washington, D.C.

Sangjun Lee (Ph.D. expected 2014) has taken a position as associate research fellow at Korea Energy Economics Institute, South Korea.

Nathalie Me-Nsope (Ph.D. 2014) has taken a position with International Studies and Programs in the Finance and Human Resources Department at Michigan State University.

Vivek Pandey (Ph.D. 2014) has taken a position as assistant professor, Institute of Rural Management Anand (IRMA), Gujarat, India.

Kathleen Sprouse (M.S. 2013) has taken the position of agriculture and natural resources Extension educator in Madison County with Purdue University Extension, in Anderson, Indiana.

Eleanor Turner (M.S. 2014) has taken the position of research initiatives manager at the Center for Effective Global Action (CEGA) at the University of California - Berkeley.

Jessica Vila-Goulding (M.S. 2014) has taken a position as economist, Middle East and Africa, at Ford Motor Company, Dearborn, Michigan.

People and Awards

Faculty and Staff News

Steve Hanson was appointed dean of International Studies and Programs by the MSU Board of Trustees on April 22.

Debbie Conway received the Outstanding Individual Staff Award for from the College of Agriculture and Natural Resources (CANR) Staff Advisory Committee. At the award ceremony March 19, Dean Fred Poston cited the depth of her knowledge, her independence and the friendliness with which she approaches her work as graduate secretary.

Satish Joshi has been promoted to professor (tenure-system). Promotions have been approved for fixed-term faculty Cynthia Donovan to associate professor and Duncan Boughton and Mywish Maredia to professor.

Faculty Awards
Rick Horan received MSU's W.J. Beal Outstanding Faculty Award at a ceremony on February 11. The award citation noted his contributions to "the understanding and management of coupled economic and environmental systems."

Tom Reardon has been selected as a fellow in the Agricultural and Applied Economics Association (AAEA). The award will be conferred at the AAEA annual meeting on July 28. The AAEA Exchange newsletter cited his "seminal contributions to our field in three domains, all focused on transformation of agrifood systems and rural economies."

Larry Zink was awarded the Teaching Award of Merit from the North American Colleges and Teachers of Agriculture. He received the award certificate February 25.

Brent Simpson, in his role as deputy director of the Modernizing Extension and Advisory Services (MEAS) project, was recognized on April 14 by the University of Illinois with the 2014 College of Agricultural, Consumer and Environmental Sciences Team Award for Excellence.

Student Awards and Honors
Ayala Wineman won the Department's Best M.S. Thesis Award of 2013 for "The Multidimensional Nature of Household Food Insecurity in Rural Zambia: A Panel Analysis" (major professor: E. Crawford).

Min Chen won the Department's Best Ph.D. Dissertation Award of 2013 for "Valuation of Public Great Lakes Beaches in Michigan" (major professor: F. Lupi).

Leah Harris, Ph.D. student, won first place for a 10-minute presentation at the MSU Graduate Academic Conference on March 27 (http://cogs.msu.edu/GAC.html).

Award winners from among the 17 presentations at the Graduate Research Symposium on March 20-21 were:

Completed Research: Leah Harris, "Designing Experimental Auctions to Evaluate Incentives for Environmental Stewardship in Agricultural Landscapes"
Research In Progress: Uchook Duangbootsee, "Ranking of Rice Farm Policy in Thailand: An Application of a Stochastic Efficiency with Respect to a Function"
Research at Idea Stage: Ayala Wineman, "The Impact of Emerging Land Markets on Migration Trends in Rural Tanzania"

Elena Dulys-Nusbaum was awarded a 2014 Tinker Graduate Student Field Research Grant (pdf) by the MSU Center for Latin American and Caribbean Studies.

Miltone Ayieko and Chenguang Wang were awarded Ph.D. Summer Research Fellowships by the MSU Graduate School for Summer Semester 2014.

The Honors Banquet of the College of Agriculture and Natural Resources celebrated the accomplishments of ten AFRE undergraduate students on March 20:

Outstanding Academic Achievement in Agribusiness Management: Katelyn Horning and Charles Loveland
Outstanding Senior in Agribusiness Management: Sarah Michalek
Outstanding Academic Achievement in Food Industry Management: Zhen Mao
Outstanding Senior in Food Industry Management: Jessica West
Outstanding Academic Achievement in Environmental Economics and Policy: Anthony Orlando
Outstanding Senior in Environmental Economics and Policy: Molly Black
Jake and Maxine Ferris Undergraduate Study Abroad Scholarships: Leticia Briseno, Leighton Hackert, Kenneth Hartman, Katelyn Horning, Lauren Moore, Julius Moss, Jason Smith, Cheick Tangara and Paul Vilker.

The Spartan National Agri-Marketing Association (NAMA) team finished in fourth place at Marketing Competition of the 2014 National NAMA Convention, April 9-11 in Jacksonville, Florida. This was the team's fourth Final Four finish in the past five years. Members of the Presentation and Marketing Support Team who competed were agribusiness management majors Jasper Cunningham, Tyler Hoopes, Katelyn Horning and Spencer Short; crop and soil sciences junior Addie Spolyar; environmental studies and agriscience junior Kelly White; and food industry management junior Kelsey Vanderploeg. The team was advised by AFRE associate professor Laura Cheney along with Stephanie Lelo and Melissa Rogers of GreenStone Farm Credit Services.

Masthead

Advancing Economics, Transforming Lives is the quarterly newsletter of the Department of Agricultural, Food, and Resource Economics at Michigan State University (http://www.afre.msu.edu/).

Editor:                       Scott M. Swinton

Writers:                   Mark J. Meyer and Christine Meyer

Assistant Editor:     Debbie Conway

Editing Assistance: ANR Communications