• The Determinants of Small Business Success in Alaska: A Focus on the Creative Class

      Guettabi, Mouhcine (International Economic Development Council, 2014-12-01)
      Although the contribution of small businesses and entrepreneurship to regional communities and the economy at large is widely supported in the literature, there does not seem to be a universally accepted definition for small businesses and entrepreneurship. Without an agreed upon definition, it is challenging for governments and policy makers to address the needs, concerns, and issues of these firms. It also makes it difficult to understand the link between small businesses and economic growth.
    • Mining and Sustainable Communities: A Case Study of the Red Dog Mine

      Loeffler, Bob (International Economic Development Council, 2014-12-01)
      Politicians and planners work to attract economic development because of the desire to provide jobs and income for residents, and to find tax revenue to fund government services. Their focus is usually statewide: jobs, income, and taxes for Alaskans. This article is about the impact of one remote development project on nearby, Native communities. It is about the community effects of the Red Dog Lead and Zinc Mine in northwest Alaska. 2014 was the 25th anniversary for the mine, which began operation in 1989. This case study evaluates the mine’s effects on the communities after 25 years of operation. It begins with an overview of the communities and the mine. It evaluates the mine’s effects on these communities in four ways: 1) jobs and income, 2) governance, 3) education, and 4) subsistence. This case study provides lessons for development in other rural communities
    • Quantifying expert opinion with discrete choice models: Invasive elodea's influence on Alaska salmonids

      Little, Joseph; Hayward, Gregory D. (Elsevier, 2020-10-01)
      Scientific evidence should inform environmental policy, but rapid environmental change brings high ecological uncertainty and associated barriers to the science-management dialogue. Biological invasions of aquatic plants are a worldwide problem with uncertain ecological and economic consequences. We demonstrate that the discrete choice method (DCM) can serve as a structured expert elicitation alternative to quantify expert opinion across a range of possible but uncertain environmental outcomes. DCM is widely applied in the social sciences to better understand and predict human preferences and trade-offs. Here we apply it to Alaska's first submersed invasive aquatic freshwater plant, Elodea spp. (elodea), and its unknown effects on salmonids. While little is known about interactions between elodea and salmonids, ecological research suggests that aquatic plant invasions can have positive and negative, as well as direct and indirect, effects on fish. We use DCM to design hypothetical salmonid habitat scenarios describing elodea's possible effect on critical environmental conditions for salmonids: prey abundance, dissolved oxygen, and vegetation cover. We then observe how experts choose between scenarios that they believe could support persistent salmonid populations in elodea-invaded salmonid habitat. We quantify the relative importance of habitat characteristics that influence expert choice and investigate how experts trade off between habitat characteristics. We take advantage of Bayesian techniques to estimate discrete choice models for individual experts and to simulate expert opinion for specific environmental management situations. We discuss possible applications and advantages of the DCM approach for expert elicitation in the ecological context. We end with methodological questions for future research.
    • Resource rents, universal basic income, and poverty among Alaska’s Indigenous peoples

      Berman, Matthew (Elsevier, 2018-02-24)
      The Alaska Permanent Fund Dividend (PFD) program provides universal basic income (UBI) to all residents from investment earnings of a state sovereign wealth fund created from oil rents. This paper evaluates the effect of the PFD to mitigate poverty among the state’s rural Indigenous (Alaska Native) peoples: a population with historically high poverty rates living in a region with limited economic opportunities. Errors in recording PFD income in data used to calculate official poverty statistics cause them to misrepresent poverty in Alaska and understate the effect of the PFD. Estimating poverty rates with and without PFD income therefore requires reconstruction of family incomes from household-level data. Estimated poverty rates from reconstructed income show that the PFD has had a substantial, although diminishing mitigating effect on poverty for rural Indigenous families. The PFD has had a larger effect on poverty among children and elders than for the rural Alaska Native population as a whole. Alaska Native seniors, who receive additional sources of UBI derived primarily from resource rents besides the PFD, have seen a decline in poverty rates, while poverty rates for children have increased. Evidence has not appeared for commonly hypothesized potential adverse social and economic consequences of UBI.
    • Resource Revenues and Fiscal Sustainability: Lessons of the Alaska Disconnect

      Knapp, Gunnar (International Economic Development Council, 2014-12-01)
      In 1968, the Prudhoe Bay oil field was discovered on Alaska’s North Slope – the largest oil field ever discovered in North America. That discovery led to an economic and fiscal transformation of the young state of Alaska. A 1969 sale of Prudhoe Bay leases brought the state $900 million in one day ($4.9 billion in 2014 dollars) – six times the state’s budget that year of $115 million (Ragsdale, 2008). After the completion of the Trans-Alaska pipeline, oil began flowing from the North Slope – bringing the state very large annual oil revenues. Cumulatively, between 1978 and 2014 the state earned $111 billion in unrestricted general fund oil revenues ($164 billion expressed in 2014 dollars). 1, 2 (See Table 1.) It has not been a smooth ride. Annual state oil revenues have varied widely since North Slope production began, particularly because of changes in oil prices, but also because of changes in oil production, costs of production, and oil tax laws (Figure 1). Soaring oil revenues in the early 1980s were followed by 20 years of decline, including a very sharp drop in 1987 which contributed to a severe recession in Alaska. Rising prices brought soaring revenues again from 2005 to 2012 – followed by another very sharp drop since 2012, with drastically lower oil revenues projected for FY 2015 and FY 2016.
    • Who Benefits from an Oil Boom? Evidence from a Unique Alaskan Data Set

      James, Alexander; Guettabi, Mouhcine (Elsevier, 2020-08-26)
      Oil booms have been shown to increase local employment and wages. But these effects reflect the aggregated experience of residents, commuters, and recent migrants alike. This paper takes advantage of a unique data set that identifies a rich set of labor market outcomes by place of residence, rather than by place of work. Exploiting this feature of the data, we examine the effect of a major oil boom on employment and wage outcomes in the North Slope Borough of Alaska. This analysis is juxtaposed with a more conventional one that uses place-of-work data collected from the Bureau of Economic Analysis. Using the Synthetic Control Method, we find that the oil boom of the late 2000s significantly increased non-residential employment. While the boom caused residential employment to shift from the public to the private sector, total residential employment was unaffected. There is weak evidence that residential wages increased in response to the boom. These results are important as drilling decisions are often negotiated locally by interest groups that might be less concerned with general equilibrium effects.