Bailout

The blameless Spotted Owl

By Felix Salmon

There’s a nice empirical post-script to the debate over the economic effects of classifying the Spotted Owl as an endangered species. Freakonomics cites a study putting the effect at $46 billion, but others, including John Berry, who wrote a story on the subject for the Washington Post, think it’s much closer to zero.

And now it seems the Berry side of the argument has some good Freakonomics-style panel OLS regression analysis of the microeconomy of the Pacific Northwest to back up its side of the argument. A new paper by Annabel Kirschner finds that unemployment in the region didn’t go up when the timber industry improved, and it didn’t go down when the timber industry declined — not after you adjust for much more obvious things like the presence of minorities in the area.

From the abstract:

The controversy that ensued with this listing quickly became framed as one of jobs versus the environment, a contention that often characterizes conservation efforts. This contention is closely tied to export-based economic theory which assumes that a rural area’s natural resource commodity base is the most important factor in economic development and community well-being. However, other factors could impact well-being… Industrial restructuring and the presence of minorities are the only significant explanatory variables for poverty. The presence of minorities is the only significant variable for unemployment rates.

That’s industrial restructuring in the timber industry as a whole that we’re talking about here, not the effects of the Spotted Owl decision specifically. Employment in the timber industry in the region generally was in terminal decline whether or not the Spotted Owl was made an endangered species, and the decision to list the owl had zero visible effect either way.

Just don’t expect this particular paper to make it into the next edition of Freakonomics.

Full post as published by Macroprudential on March 20, 2010 (boomark / email).