ECO 498C Senior Seminar in Economics Spring 2015 3 credit hours; 3 hours lecture MWF 10:20-11:10 Room 115 FCB Instructor: Professor Dean Smith: Office: Rm. 304 Phone: 3-7396 e-mail: dean.smith@nau.edu Office hours: MW 8:30-10:00 and by appointment Class website: http://franke.nau.edu/about-the-fcb/faculty/dean_smith “Arizona’s water problem is grave. The beautiful scenery, fine climate and fertile soil, like those of other southwestern states, have combined to entice an even larger number of people to settle there, and water demands have grown accordingly.” 1963 USGS “The goals set for the next 50 to 100 years should address the needs of sustainable development and preservation of water supplies for future generations of Arizonans. They should include achieving safe-yield in certain areas and looking beyond domestic, industrial and agricultural uses to the effect water use and allocation have on riparian areas, the environment and our overall quality of life.” (Seventy-first Arizona Town Hall, 1997) An Important Phrase for the Semester: "Mutually exclusive competing ends." While water is a scarce resource required for nearly all economic activities - using the broadest possible sense of the term - water use in one activity destroys its usefulness for other activities. From a geological perspective, the amount of water available on the planet has been essentially unchanged for eons. However, the usefulness of water for various activities has been changing at increasing rates over time. Water's usefulness varies based upon location, time, chemical mixture and activity. As such, many uses of water in economic activity preclude its usefulness in other activities. For example, fresh water flows reaching an ocean to maintain estuary ecosystems prevent that water being directly used for irrigation. Given the myriad uses for water, the competing ends of use are also very important: water used to irrigate crops in one location cannot subsequently - without high costs - be used for manufacturing in another location at another time. As such, it is necessary for society to determine mechanisms to allocate water efficiently between these mutually exclusive competing ends. I. Catalog Description: PAGE 7 A senior-level research course designed to give students research experience in their major field. This course serves as the capstone for the B.S.B.A in economics only. II. Prerequisites: Courses: ECO 384, ECO 385 and Senior Status (ECO 385 may be taken as a co-requisite) Justification: This course builds upon the theories of microeconomics and macroeconomics. III. Course Learning Outcomes: Upon successful completion of this course, the student will: 1. Be able to complete primary research 2. Be able to complete secondary research 3. Be able to undertake complex economic analysis with regard to business or government strategic issues. 4. Be able to explain in written communication forums the results of said analysis. 5. Be able to explain in both written and oral forums conflicting aspects of said analysis. 6. Improve research and writing skills 7. Further develop oral communication and argumentation skills IV. Course Materials: Required books The Great Thirst, Revised Edition, Norris Hundley, Jr., University of California Press, 2001 Managing Water: Avoiding Crisis in California, Dorothy Green, University of California Press, 2007 See the class website Additional Suggested Readings (in a purely random order) Fire on the Plateau, Charles Wilkinson, Island Press, 1999 Cadillac Desert, Marc Reisner, 1993, Penguin Books A Great Aridness, William deBuys, Oxford University Press, 2011 To Follow the Water, Dallas Murphy, Basic Books, 2007 Water in the 21st Century West, Char Mill, ed., Oregon State University Press, 2009 PAGE 7 Whose Water is it?, Bernadette McDonald and Douglas Jehl, eds., National Geographic, 2003 The Owens Valley and the Los Angeles Water Controversy, Richard Cook Wood, University of the Pacific, 1973 Water: The Fate of our Most Precious Resource, Marq De Villiers, Houghton Mifflin, 2000 William Mulholland and the Rise of Los Angeles, Catherine MulhollandUniversity of California Press, 2000 Dry Spring, Chris Wood, Raincoast Books, 2008 Water and the West, 2nd edition, Norris Hundley, Jr., University of California Press, 1975 Introduction to Water in California (revised), David Carle, University of California Press, 2009 Crossing the Next Meridian, Charles Wilkinson, Island Press, 1992 Dead Pool, James Lawrence Powell, University of California Press, 2010 The Secret Knowledge of Water, Craig Childs, Little Brown & Company, 2000 Water and Power, William L. Kahrl, University of California Press, 1982 The Owens Valley Controversy and A.A. Brierly: The Untold Story, Robert A. Pearce, 1999 Vision or Villainy, Abraham Hoffman, Texas A&M University Press, 1981 The Story of Inyo, W.A. Chalfant, Community Printing and Publishing, 1922 Storm Over Mono, John Hart, University of California Press, 1996 V. Teaching Methods: Teaching methods vary and include lecture and extensive classroom discussion on historical, theoretical and current issues in economics. PAGE 7 VI. Mechanisms for Feedback: The professor provides written comments and evaluations on all assignments for this course. Students also have the opportunity to interact with the professor during office hours and through the campus e-mail system. VII. Evaluation Tools: Theory review: Each student has been assigned a random number. A list of review questions has been developed. This will be distributed during the first day of class. During the second day of class each student will turn in a ONE page, hand written answer to the assigned question. The answer may include graphs or equations as deemed appropriate by the student. During the second class period, each student will also provide a 2-3 minute oral presentation to the class explaining the answer. (You may use the classroom boards to draw graphs.) You are to complete this assignment with the knowledge you already have in your head from your previous coursework and thought. It is an act of academic dishonesty to use any type of resource (books, notes or web)- including discussing the question with your classmates. See the syllabus regarding academic dishonesty. Economics Knowledge Assessment: This course is primarily designed to provide experience as a practicing economist. Becoming a professional economist or a graduate student therein or utilizing your degree in other venues also involves a working knowledge of the language, tools and applications of economics. In order to evaluate each student’s knowledge of the economics discipline, three different assessment instruments have been designed by the Economics faculty. On March 2, a multiple choice exam will be administered during the first half of the class period covering microeconomics knowledge. On March 6, a multiple choice exam will be administered during the first half of the class period covering macroeconomics knowledge. The Two Cities assignment (below) will also be assessed for the application of economics to the development of water systems in two cities. Guidelines will be provided for all three assessment projects. ETS Proficiency Profile Requirement As a student enrolled in this capstone course, you will participate in the ETS (Educational Testing Service) Proficiency Profile assessment. The ETS Proficiency Profile gives you the opportunity to demonstrate mastery of essential skills you have learned and practiced throughout your undergraduate education: reading, writing, critical thinking, and mathematics. After you complete the assessment, you will immediately receive your Individual Student Score Report and information about how you can compare your performance to other PAGE 7 students nationally. If you score in the top 25% of students taking the ETS Proficiency Profile, you will be entered into a drawing for four $400 University Bookstore gift cards. You will take the ETS Proficiency Profile with other students in our class April 3. I will notify you regarding the location of our. Our testing session will be online in a computer lab on either north or south campus. The ETS Proficiency Profile is in a multiple-choice format and takes 40 minutes to complete. Western Governors’ Association Analysis: The WGA has recently released a new report “Clean, Reliable Water Supplies for the West.” Each student will analyse this document and submit a 5-8 page summary. A Tale of Two Cities: Hundley analyses the water development of both San Francisco and Los Angeles. Additional analyses can be found among the books on the reading list. Each student will submit a 5-8 page report comparing the political and economic actions of these two cities. Research Project: each student will complete a senior research project. The final draft should be 8-10 pages plus references. This project is the culmination of the economics programs at Northern Arizona University. In completing this project, the student should refer to all previous course work and skill acquisition (including from your internships and other employment) that has taken place. Those skills and tools previously developed will be vital for the development of the project. However, there will be differences between skill and tool sets for different students. Thus, while some students will use econometrics to analyze various data sets, other students will use analytical tools to explain various policy instruments, and other students will use theoretical analysis to explain various market and non-market outcomes regarding water issues in the West. Grade Distribution Review Question 5% Western Governors’ Association Review 10% San Francisco vs. Los Angeles 10% Mircoeconomics Assessment Exam 5% Macroeconomics Assessment Exam 5% ETS Assessment Exam 2% Research Project Research question Outline Meeting Draft 1 Draft 2 Poster Presentation Final Report 5% 8% 10% 10% 10% 10% 10% Topical Areas: PAGE 7 Mono Lake economic issues The Mono Basin on the eastern side of the Sierra Nevada Mountains in California is the sole water input into Mono Lake. Mono Lake is a unique ecosystem and an important feeding area for migrating and nesting birds. The withdrawals from the major streams feeding the Lake by LADWP have had substantial impacts on the level of the Lake. In 1983 a major legal decision was finalized to increase the inflows. This research topic will look at the ongoing issues from an economic perspective. http://www.monolake.org/ LADWP economic issues The Los Angeles Department of Water and Power is responsible for providing resources to the City. A lengthy history of water acquisition for the arid location is extremely interesting. This research area will look at the current economic conditions facing the Department. https://www.ladwp.com/ Mono vs. LADWP economic costs/benefits The long history of withdrawals of water from the Mono Basin by the LADWP has created an atmosphere of conflict and collaboration. The research project will investigate the current issues regarding the conflict. Recent documents should be investigated. Desalinization cost/benefit One method of increasing water supplies is to desalinate (clean) either sea water or ground water. This project will investigate various technologies and the cost/benefits of each. Conservation Programs costs/benefits Most water supply entities have some kind of water conservation program. These vary from water reduction requirement (enforced) to rebates programs (incentives) to simple information programs. Most states and the federal government have programs. The research programs will look at the cost/benefits of these programs from both the consumer and the supplier perspective. Students may complete this project from a general perspective or by investigating specific water supply entities. Palm Springs and the 2014 Coachella Valley Integrated Regional Water Management Plan PAGE 7 Palm Springs, located in the Coachella Valley, CA, has developed comprehensive water management plans internally and in conjunction with the other 4 water agencies located in the Valley. The myriad issues facing urban areas within the arid Southwest are addressed within these plans. A detailed SWOT analysis of these plans would make for a much further understanding of the issues. (The average annual precipitation for Palm Springs, 1927-2005, is 5.53 inches. {1981-2010: 4.83 inches}) Salton Sea The Salton Sea Authority is a Joint Powers Authority (JPA) responsible for overseeing the comprehensive restoration of the Salton Sea. The Salton Sea is a unique ecological, economic and geological system is southeastern California. Revitalizing the environment and economy of the Sea requires an integrated approach to recognizing old problems as potential new solutions, and to delivering multiple benefits with thoughtful strategies that integrate economic opportunity and environmental stability. The Salton Sea Authority is aggressively pursuing projects that can be expanded from near term to long term actions. Water quality cost/benefits The Clean Water Act places specific requirements on water suppliers. This research project will investigate the cost/benefits of the CWA from the prospective of the suppliers (implementation) and the consumers (health). Developing rational water markets vs. current structures From an economic perspective most water supply and consumption programs are irrational since there is no “market” pricing. This research will investigate the literature concerning rationalizing water markets from an economic perspective. This research must also investigate the legal and political barriers to transitions. Colorado River Compact vs. rational markets: Water transfers and Water Banks (WGA) The member states of the CRC tend to agree that the Compact does not rationalize water use. This research will investigate the ideas being developed, particularly by the Western Governors Association concerning water transfers and water banks. What is the current status of these programs and how will they improve, if fully implemented, water use from an economic efficiency perspective? What are the legal and political barriers to implementation? Utilitarian uses (domestic, agriculture, commercial, flood control) vs. non-utilitarian uses (recreation of wild and controlled water, fishing, recreation etc.) see Verde Project (off stream vs. on stream uses) PAGE 7 Surface water has many possible uses. In many instances these uses are mutually exclusive. Alternatively, water storage (reservoirs) systems developed for utilitarian uses also provide non-utilitarian uses. This research will investigate the trade-offs between these distinct uses. See the Verde River project, Mono Lake issues and Hetch Hetchy. See also John Muir’s writings concerning Hetch Hetchy for an early philosophical discussion. Private goods versus public provision of water services From a philosophical and economic theory perspective, this research will investigate the Samuelson distinction between private and public goods. What are the historical precedencies for determining the classification of water resources (see Hanemann)? Non-market valuation methodologies Most non-utilitarian uses (fishing, boating, and recreation) have no market valuation. This research will investigate the variety of economic tools to evaluate the methodologies for valuing these resources. Current Federal Water programs (Army Corps of Engineers, Bureau of Reclamation) Given the charges of ACE and the BR, what are the current programs of these governmental agencies? Are there other governmental agencies involved in water management? How efficient are these programs? Historical analysis of Bureau of Reclamation costs and revenues The basic charge of the Bureau was to manage water resources for agricultural purposes. Supposedly, the Bureau was to be basically self-sufficient. Has this been the case? Have the acreage limits itemized in the original 1902 legislation been followed? Has the Bureau been efficient in developing water projects? Water/energy nexus The water/energy nexus is very confusing. In some cases water is used to convert potential energy into electricity (hydropower). For example the Bureau of Reclamation has built dams to provide water storage for flood control and irrigation. These dams have produced electricity for sale. On the other hand, water pumping requires the substantial conversions of energy as water is pumped upward. This research will investigate the “net” use of energy for various water projects. PAGE 7 San Francisco Bay/Sacramento – San Joaquin Delta Estuary (Bay-Delta) Program The Sacramento-San Joaquin Bay-Delta (“Delta”), a 700-mile maze of sloughs, canals, waterways and islands located where the San Joaquin and Sacramento rivers converge is the largest estuary on the West Coast and California’s main water supply hub. The Delta is one of the most important aspects of California’s water delivery system – serving millions throughout Northern, Central and Southern California – and is home to hundreds of species of fish and wildlife. In addition to supporting an important ecosystem, water from the Delta is indispensable to the agricultural industry and businesses that drive our state’s economy. Water conveyed through the Delta sustains $400 billion of California’s statewide economy. Currently, there are numerous ideas concerning the delta and its economic impacts. This research will investigate these projects. Econometric Modeling Use your technical skills to develop an econometric model to investigate water resources. This research will investigate the development of a model with dependent variables and independent variables. For example, what is the relationship between indigenous precipitation, water usage, water rates, population growth and economic growth? Klamath Klamath River Basin, which covers 10.5 million acres in southern Oregon and northern California, has been long renowned for its lakes, rivers, hunting and fishing opportunities and strong agricultural economy. The Basin is home to six federally-recognized tribes and several National Wildlife Refuges, Parks and Forests. The Klamath Basin has been in the forefront of national attention due to contentious resource issues including water allocation, water quality, and threatened and endangered species. The Klamath River has been the third-largest producer of salmon on the West Coast, following closely behind the Sacramento and Columbia rivers. In 2002, a massive die-off of over 33,000 adult salmon on the Klamath River brought renewed attention to this area. Impact studies What are the economic impacts of water projects? What are the water impacts of economic projects? What are the water and economic impacts of legal decisions? This PAGE 7 research will investigate one of these questions. Three examples come to mind. First, presume a new irrigation system is being proposed or a dam is proposed to be decommissioned (removed), what will be the economic impacts of this project? Second, presume a new economic development project is being proposed – a steel plant or a saw mill – what will be the water impacts, including secondary and tertiary, of this project? Third, consider, for example the Mono Lake diversion issue, when an environmental policy impacts water management, what will be the reverberating impacts on water and economic resources? For each of these projects, build a model to explain the linkages between variables. Collaborative Water Management Most water management projects involve numerous stakeholders. For nearly any project these stakeholders have mutually exclusive goals and aims. This research will investigate the literature concerning CWM methodologies and systems. Specific examples should also be explored. Indian Water Rights The Winters Doctrine provides legal standing to Tribes’ water rights. The 1922 Colorado River Compact ignored the Tribes. What is the current standing of Tribes’ water rights? For example the Navajo rights have been reasonably determined and the Navajo Nation has developed several proposed projects to implement their rights. Other tribes throughout the West are in similar situations. This research will investigate this issue in general or a specific tribe. This project will focus on the economic implications of the rights issue. Other Be creative and come up with your own topic that is clearly attached to the current water issues in the West. Research Process Obviously, there is great overlap in the above Topical Areas above. The initial due date of February 4 is to simply pick an overall topic area. This is called picking a "universe." The month of February is then to be used to explore that "universe." Using as many resources as possible - given time constraints and all that - simply explore the specific topic area you have selected. The next due date is at the end of February. By this time, you should have explored the "universe" and selected a slice of that universe to study in detail. On February 25, turn in a 1 page Research Question. You need to develop a specific question that is important to understanding the current crisis. If the answer to your question is easily found in the existing literature, then you do not have a meaningful question. In your 1 page effort, you need to include a discussion as to why this is an PAGE 7 important issue. (Why should you get "paid" for the next 10 weeks of work?) Finally, you need to present a discussion as to how you plan to develop an answer to your question. (How will you earn that "pay?") If you want to develop an econometric model, what data will you use? If you developing a theoretical model, what foundations will you be using? During the week of March 9 you will meet with Professor Smith to discuss a detailed outline. During this meeting, you will discuss any questions or concerns you have about completing the project. On April 1 a rough draft is due. This will be evaluated based on the quantity and quality of the completed research instead of the quality and quantity of writing. Although complete sentences and paragraphs should be used, the true importance of the first rough draft is to discover holes in the research: what is missing? Additionally, the organization of your report will be evaluated. On April 15 a second rough draft is due. By this time, you should be getting close to a polished final product. There should be no glaring holes in your analysis. There should be no scaffolding required for the structure of your argument. On April 27, 29 and May 1 Oral Presentations will be made. Each student will be allocated a 10-15 minute period (based on class enrollment). Evaluation will emphasize the presentation according to the FCB oral presentation rubric. On April 24, NAU holds the Research Symposium. You will have a completed Poster prepared for the Symposium on April 20. The April 24 event will be a required "field trip." for all students. If you fail to attend the event, your Poster will not be evaluated. Institutional excuses will be provided as necessary. You MUST register prior to March 13: http://nau.edu/Undergraduate-Research/Undergraduate-Symposium/ Finally, your final report will be due at noon on May 4. The final report will include an Executive Summary of your work. VIII. Attendance: You are expected to attend all class periods. An attendance sheet will be placed on the front table prior to each class. At the scheduled starting time of each class, the sheet will be removed. If you arrive late to class, you will be marked absent. If for any reason, you leave class during the class period, you will be marked absent. Only official university approved absences must allow you to miss a class. Note: simply visiting the health center is not an excuse. You MUST inform me of your expected absence BEFORE you miss a class period. For each unexcused absence, a reduction in the semester grade will be made equivalent to 5% (half a letter grade and this includes March 13 of the overall available grade. In this class, and every other class, you should expect to spend a minimum of 2 hours outside of class for every class hour. In our case, this means 3 hours of study for PAGE 7 every class period. Feel free to stop by my office at any time if you need help or guidance. As YOUR senior capstone course, you should invest heavily in your project. IX. Statement Regarding Academic Integrity: A zero tolerance on cheating is upheld in this course. Plagiarism is a form of cheating. Penalties for materials that are turned in that have resulted from cheating and/or plagiarism will result in a failing grade for the course and student names are reported to the FCB and the University. The syllabus must contain the HYPERLINK "http://www.franke.nau.edu/StudentResources/CodeOfConduct/" FCB Code of Conduct and the HYPERLINK "http://jan.ucc.nau.edu/academicadmin/plcystmt.html" University policy on Scholastic Dishonesty . As described in the course outline students are encouraged to share source materials for the research project; however, each assignment is to be completed individually and with integrity. Students signing the attendance sheet for another student are engaging in academic dishonesty. In this case, both students will be determined to have engaged in academic dishonesty and will incur the penalties described above. Plagiarism: as quoted from University of British Columbia, (2011) "APA Citation Style", HYPERLINK "http://web.ubc.ca/okanagan/library/citations/apa.html" http://web.ubc.ca/okanagan/library/citations/apa.html , accessed January, 11,2011. "What kinds of sources do I document? direct quotations from a book, article, film, letter, email, lecture, etc. single words, short phrases, sentences and longer passages quoted from books, articles etc. ideas you draw from a source but present entirely in your own words paraphrases and summaries of books, journal articles, pamphlets single words, short phrases, sentences and longer passages quoted from books or articles used FCB Business Communication Center At all stages of the project, and for the 2 required Summaries, you are encouraged to utilize the resources of the BCC. The website is listed below. HYPERLINK "http://www.franke.nau.edu/StudentResources/commcenter/%20" http://www.franke.nau.edu/StudentResources/commcenter/ References PAGE 7 All drafts and the final paper will include a properly formatted bibliography. Any use of specifically quoted data or specifically quoted language must be cited within the text with parenthetical references such as (Smith, 2010, page 34). In addition to the required readings, you should be using additional materials dependent on your specific topic. Cline Library has numerous useful websites posted on their Citation & Style Guides page. HYPERLINK "http://library.nau.edu/cf/info/refresources.cfm?subject=Citation%20&%20Style%20Gui des" http://library.nau.edu/cf/info/refresources.cfm?subject=Citation%20%26%20Style%20 Guides Cline Library has numerous useful websites posted on their Writing Resources page. HYPERLINK "http://library.nau.edu/cf/info/refresources.cfm?subject=Writing%20Resources%20" http://library.nau.edu/cf/info/refresources.cfm?subject=Writing%20Resources Wikipedia is considered a very bad source for material. Career Exploration Day On February 25, FCB will be hosting a variety of prospective employers with the building. You are encouraged to dress professionally and bring a professional level resume. Alternatively, if you are planning on going to graduate school, make sure all your deadlines are met and that you have taken the appropriate GRE/GMAT/LSAT exams. (After thorough study therefore.) XI. Code of Professionalism: The educational experience at the Franke College of Business is designed to prepare you to become community leaders and to start your professional career. There is no better place to begin this process than in your preparation for and behavior in class. All students will sign a Code of Conduct Agreement. FCB Business students are offered the opportunity to participate in the FCB Professionalism Recognition Program. NAU W.A. Franke College of Business Code of Conduct Responsibility: I will be on time, prepared, attentive, and professional in my scholastic endeavors. I will take responsibility for my actions and make every effort to learn as much as possible from the educational opportunities presented to me. Respect: PAGE 7 I will meet my commitments to others and treat everyone with respect and civility. I will respect our learning environment and help preserve its physical condition. Integrity: I will be a reliable and honest contributor to individual and group assignments. I will not seek or help others gain unfair advantage in completing academic requirements. I understand that there are severe consequences for academic dishonesty. Expectations about Behavior Responsibility: Attend all classes and meetings on time Do not wander in and out of classes Participate but don’t dominate Pay attention Respect: Turn off cell phones when you are in class Do not use computers during lectures for non class-related purposes Make sure language and conversations are appropriate to the classroom setting Behave in a polite and professional manner Integrity: Do not engage in any act of academic dishonesty, including but not limited to: sharing a calculator during a quiz or exam pre-programming a calculator for use during a quiz or exam unless specifically authorized by the instructor using notes or books during an exam unless specifically authorized by the instructor looking at another's exam or allowing another student to look at your exam exchanging exams, passing notes or text messages discussing answers during an exam having another take an exam for you or taking an exam for another unauthorized possession of or access to examination materials by any means, including electronic transmission, theft, photocopying, electronic or failing to return exams altering exams or assignments while in student's possession for review in an attempt to obtain a more favorable grade unauthorized collaboration on assignments submitting the same paper or substantial portions of a paper for multiple classes fabrication of information and citations submitting other's words, ideas, materials or work without properly acknowledging and appropriately referencing them altering, forging or misusing an academic record electronic theft of computer programs, data, or text belonging to another PAGE 7 NORTHERN ARIZONA UNIVERSITY POLICY STATEMENTS See the following website for important information: http://nau.edu/OCLDAA/_Forms/UCC/SyllabusPolicyStmts2-2014/ PAGE 7