NM Research 2024

The 3rd Annual New Mexico Economics Research Day is August 16, 2024!

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At the University of New Mexico Department of Economics, our faculty and graduate students engage in impactful research and outreach for the state and people of New Mexico. Please click the link below to jump to the project and learn more:

Valuing Urban Greening using Hedonic Pricing: The Middle Rio Grande Valley in the Greater Albuquerque Area

Using the hedonic pricing method (HPM), the objective of this research is to investigate the impact of heat mitigation and various greenness metrics on property values in the greater Albuquerque area. With a unique dataset of more than 5,500 residential properties listed for sale between October 2022 and February 2024, the econometric analysis examines both the valley floor (properties within the Middle Rio Grande Conservancy District) and outside it.. Due to confidentiality restrictions of property transaction data in the study area, we sourced publicly available property data from Zillow, including expected price measures and various structural attributes (e.g., number of bedrooms and bathrooms, lot size). We then geolocated each property and integrated neighborhood data (e.g., population density, percentage of white population, etc.). Additionally, we gathered environmental quality variables (e.g., heat mitigation index from the InVEST urban cooling model, enhanced vegetation index, land surface temperature) to create a comprehensive geospatial dataset for our analysis.

Faculty Involved:Robert P. Berrens, Regents Professor, Department of Economics, University of New Mexico 

Graduate Student(s):Samuel Asare, PhD Student, Department of Economics, University of New Mexico

Undergraduate Student(s): Brennan Davis, MCRP/MWR Graduate, Community & Regional Planning/Water Resources, University of New Mexico

Undergraduate Student(s): Sean Yonemoto, Undergraduate Student, Department of Economics, University of New Mexico

Associated Writer: John Fleck, Writer in Residence, Utton Center, School of Law, University of New Mexico

Is Food Insecurity a Good Measure of Dietary Quality in New Mexico? 

In fiscal year 2023, New Mexico spent $29.9M on programs supported through the Food Initiative. Most of these programs are focused on improving access to food. However, improved access to food does not guarantee improved nutrition and overall dietary quality. This research develops the dietary quality measures necessary to assess efforts to improve access to high quality food.

This study develops several measures necessary for going beyond assessing simply access to food to assessing actual dietary quality. The Dietary Diversity Scores focus on ensuring variation in diet, the Food Consumption Score introduces a weighted measure of dietary variation, emphasizing high quality nutritional sources, and the fruit and vegetable consumption measures directly focus on a key component of a healthy diet, unprocessed produce.

After developing five measures of dietary quality, this study compares these measures with measures of food insecurity, and finds that, while food desert measures were developed by the USDA and used extensively in food policy nationwide, these measures are unable to explain differences in dietary quality in New Mexico, especially after controlling for basic differences across households, such as income, household size, and the presence of children. In NM, the most useful measure of food insecurity or a lack of access to high quality food is whether a household resides in an urban or rural setting. Urban households have better dietary diversity and purchase more produce than rural households, even after controlling for basic household characteristics.

This white paper marks the end of the first year of this project. In the coming year, the project team will assess two important factors related to access, particularly in rural New Mexico, dollar stores and rural transit systems, and how they impact food purchasing behaviors and dietary quality in New Mexico and beyond.

This work will enable New Mexico policymakers to better target food-related assistance programs by providing the dietary quality outcome variables necessary to assess these programs. Better targeted policies should focus on not just improving access to quality food sources but also improving dietary quality and associated health outcomes.

Faculty Involved: Xiaoxue Li, Associate Professor, Department of Economics, University of New Mexico

Faculty Involved: Sarah Stith, Associate Professor, Department of Economics, University of New Mexico

Graduate Student(s): Swarup Paudel, Ph.D. Student, Department of Economics, University of New Mexico

Pluriversal Economic Systems and the “Obligation to Incorporate”:  A Loss Valuation Review

This project is separated into two parts.  Part I defines the problem of “the obligation to incorporate” as it relates to community of Mora, New Mexico and the compensation process for victims of the 2022 Hermits Peak Calf Canyon (HPCC) wildfire.  Because of political and historical circumstances, and the events that caused the HPCC, Mora currently stands uniquely protected from what we refer to as the “obligation to incorporate” which has produced an irregular possibility for cultural and ecological factors to be accepted within the bureaucratic compensation process.  We describe what factors have produced this protection from the obligation to incorporate while also revisiting how compensation structures deal with intangible value as a “pluriversal” problem.   Part II applies a critical theory approach referred to as “partial ontological layering” to the compensation problem.  Using a layered topology of a hypothetical compensation claim in the HPCC fire, this paper examines how compensation may begin to account for private losses in addition to three other key layers:  practice, place, and people (community and tradition). Both parts establish a foundation for conceptualizing loss valuation for those affected by ecological and environmental crisis, particularly in places where “informal” economies dominate.  Informed by a series of perspectives on ecological and environmental crisis, this paper will suggest a framework for determining how established tools used to provide loss valuation may be utilized, especially where damages and losses are significantly intangible.

Faculty Involved: Manuel Montoya, MJR Montoya, PhD, Associate Professor, Department of Economics, University of New Mexico

Graduate Student(s): Constanza Mier y Teran Ruesga, Graduate Assistant, University of New Mexico

Research Assistant: Augustus Guikema, University of New Mexico

Research Assistant: Cole Kochan, University of New Mexico

Heterogeneity in Price Elasticities of Urban Water Demand: The Case for Albuquerque, New Mexico 

This report examines how different factors influence water demand in Albuquerque, New Mexico. By analyzing data from the Albuquerque Bernalillo County Water Utility Authority (ABCWUA), we estimate how sensitive water usage is to changes in price across various sectors and socioeconomic groups, including differences by race and income. The ABCWUA serves as a critical supplier for the largest urban area in the state, providing approximately 100,000 acre-feet of water annually to more than 200,000 customer accounts. This service supports over 600,000 water users across the metropolitan area, including more than 155,000 single-family residential accounts (ABCWUA, 2016).

New Mexico faces significant challenges regarding the imbalance between water demand and available supply. Albuquerque, the state's most populous city, is especially vulnerable due to its large population and limited water resources. The arid climate and periodic droughts exacerbate water scarcity, making efficient water management critical (Barlow & Leake, 2012). Over-reliance on groundwater sources and the declining flow of the Rio Grande River further strain the region's water resources (Gutzler & Robbins, 2011). Climate change exacerbates these challenges, intensifying the need for effective water management strategies. Rising temperatures and shifting precipitation patterns reduce snowpack in the surrounding mountains, leading to lower river flows and diminished water supply (Overpeck & Udall, 2020). Increased evaporation rates and prolonged drought conditions place additional stress on both surface and groundwater resources (Udall & Overpeck, 2017). Consequently, there is a heightened urgency for comprehensive water management strategies that address both current demands and future uncertainties, promoting sustainable usage, conservation, and equitable distribution of water resources across all sectors.

This report estimates the price elasticities of urban water demand across various dimensions—such as different sectors, income groups, and race—to inform the design of effective water rate structures for managing increasingly scarce water resources. By utilizing recent data collected by the Albuquerque Bernalillo County Water Utility Authority (ABCWUA), the study provides a detailed analysis of water usage patterns and their responsiveness to price changes. Our research expands the current knowledge base by examining a variety of sectors, including multi-family, commercial, institutional, and city sectors in addition to single-family residential. This comprehensive approach allows for a nuanced understanding of how different sectors respond to price changes. Additionally, the investigation delves into various socioeconomic factors, such as race and income level, within the residential and multi-family sectors. By analyzing these factors, the study offers insights into the heterogeneity of water demand responsiveness across different demographic groups.

Key Findings

  • Different sectors exhibit varying price elasticities in water demand. The single-family residential sector shows higher responsiveness to price changes compared to the multi-family residential sector, which also demonstrates significant sensitivity. In contrast, the commercial, industrial, and institutional sectors tend to have lower price elasticities, indicating a smaller response to price changes. These variations highlight the need for tailored pricing and conservation strategies to address the unique characteristics and water use patterns of each sector effectively.
  • In the single-family residential sector, income also influences responsiveness to price changes, with low-income households reducing their water use by about 0.64 percent for each one percent price increase, moderate-income households by 0.67 percent, and high-income households by 0.76 percent. Similarly, in the multi-family sector, significant variations exist in how different income levels respond to changes in water prices. High-income households show the greatest sensitivity, reducing their water use by nearly 0.88 percent for each one percent increase in price, whereas low and moderate-income households exhibit a smaller reduction of about 0.73 percent.
  • While race has an impact, it is less significant and does not substantially alter the observed patterns across different income levels. Income level remains the primary driver of changes in water consumption behaviors, with race having a minor and consistent impact across different income categories.

Implications for Water Management

  • The study underscores the need for sector-specific approaches in water management. Tailoring pricing strategies and conservation policies to the unique characteristics of each sector can lead to more efficient and sustainable water use.
  • The differential impact of water pricing on consumption behavior across income levels highlights the importance of considering income heterogeneity when designing water pricing policies. Tailoring pricing strategies to account for varying price elasticities across income groups can enhance the effectiveness of such policies in promoting water conservation and ensuring equitable access to water resources.
  • Recognizing the impact of race and income heterogeneity in the single-family and multi-family sectors are crucial for developing equitable water pricing policies. This understanding is essential for informed decision-making and long-term water resource management in urban settings like Albuquerque, addressing the challenges posed by climate change and resource scarcity.

In conclusion, our findings provide critical insights for policymakers to develop targeted and equitable water management strategies in Albuquerque. Addressing the challenges posed by climate change and resource scarcity requires informed decision-making and long-term planning to ensure sustainable water resources for future generations.

Faculty Involved: Jingjing Wang,  Associate Professor, Department of Economics, University of New Mexico

Graduate Student(s): Nahid Samimimotlagh, Ph.D. Candidate, Department of Economics, University of New Mexico

Equity in Solar PV Adoption in New Mexico

The state of New Mexico passed the Energy Transition Act (ETA) in 2019 which sets statewide renewable energy standard to achieve 100% carbon-free electricity by 2045. This legislative move reflects the state’s commitment to addressing climate change. New Mexico’s unique demographic and economic landscape, characterized by its diverse population, dependence on the oil and gas industry, and substantial renewable energy resources, underscores the importance of ensuring an equitable energy transition. The focus of this research is on understanding the adoption patterns of residential solar photovoltaic (PV) systems and their implications for equity in this transition.

We construct a comprehensive dataset on solar installations collected from state agencies and utility companies to examine current trends and the distribution of solar PV adoption across New Mexico. We analyze how solar adoption varies by geographical location, income levels, and racial and ethnic groups. Additionally, we evaluate the impact of state solar tax credit on promoting solar adoption among different segments of the population and its distributional effects.

Our key findings are:

  • Residential solar PV installation in New Mexico has grown exponentially, fueled by decreasing costs and supportive tax incentives. However, this growth is unevenly distributed, with higher adoption rates observed in urban areas, higher-income neighborhoods, and White-majority census tracts.
  • There is minimal racial disparity in solar adoption within New Mexico. The predominant sources of existing adoption inequality stem from disparities in income and education level.
  • State-level incentives have effectively mitigated adoption inequality. However, the distribution of the tax credit benefits is concentrated among wealthier households with higher electricity consumption level.

This study documents the current landscape of solar PV adoption in New Mexico and provides the first evidence that the state solar tax incentive effectively promotes equitable solar adoption. We recommend the continuous monitoring and adjustment of incentive programs to ensure they remain inclusive and effective in reducing disparities in solar adoption. The findings also highlight the need for innovative and targeted policy designs to reduce structural barriers to solar adoption, enhance the distributional equity of state incentives, and reduce potential informational barriers for disadvantaged groups.

Faculty Involved: Yuting Yang, Assistant Professor, Department of Economics, University of New Mexico

Graduate Student(s): Jiaqing Zhao, Ph.D. Candidate, Department of Economics, University of New Mexico 

2023 New Mexico Economics Research

2022 New Mexico Economics Research

Compilation of New Mexico-Centric Economics Research by UNM Faculty, 2012-2023