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:
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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
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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.
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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
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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:
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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
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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)
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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.
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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
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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
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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
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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
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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:
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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
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NORTHERN ARIZONA UNIVERSITY
POLICY STATEMENTS
See the following website for important information:
http://nau.edu/OCLDAA/_Forms/UCC/SyllabusPolicyStmts2-2014/
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