Products: Hawaii's Economy
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Annual Hawaii Forecast: Expansion Will Continue, Despite Global Challenges
This year has turned out a bit better than anticipated, and prospects remain good for 2016. Next year will see some easing of visitor growth, but no retreat from the high levels of activity that have built up in recent years. The construction expansion will continue, and tightening labor market conditions will support income gains. Arrayed against this positive outlook are important global challenges, ranging from the surging dollar to Chinese slowing and renewed terrorism threats.
Forecasting in a Mixed Up World: Nowcasting Hawaii Tourism
We evaluate the short term forecasting performance of methods that systematically incorporate high frequency information via covariates. Our study provides a thorough introduction of these methods. We highlight the distinguishing features and limitations of each tool and evaluate their forecasting performance in two tourism-specific applications. The first uses monthly indicators to predict quarterly tourist arrivals to Hawaii; the second predicts quarterly labor income in the accommodations and food services sector. Our results indicate that compared to the exclusive use of low frequency aggregates, including timely intra-period data in the forecasting process results in significant gains in predictive accuracy. Anticipating growing popularity of these techniques among empirical analysts, we present practical implementation guidelines to facilitate their adoption.
The Conversation: Carl Bonham on the State Forecast Update
UHERO Executive Director Carl Bonham appears on The Conversation to talk about UHERO's State Forecast Update: Except for Weather, Outlook Shines.
UHERO State Forecast Update: Except for Weather, Outlook Shines
Hawaii’s economic outlook continues to look bright. Tourism is pushing toward new records, and the construction upswing is building in strength. The overall expansion remains solidly on track, delivering better labor market conditions and the prospect of further household income gains. Still, in the midst of this hot and soggy summer we are pondering some ominous clouds forming out on the horizon.
KITV: Carl Bonham on Falling Gas Prices
UHERO Executive Director Carl Bonham appears on KITV to talk about the effects of falling gas prices on Hawaii's economy, as well as the latest State Council on Revenues general fund forecast.
The Conversation: Carl Bonham on the State Council on Revenues General Fund Forecast
UHERO Executive Director Carl Bonham appears on The Conversation to discuss the State Council on Revenues forecast for the 2015 fiscal year.
ThinkTech Hawaii: Makena Coffman on Sustainable Hawaii
Balancing Opportunities and Costs in Hawaii's Increasingly Green Grid
Hawaii’s tourism-dependent economy and oil-fired power plants make it the most oil dependent state in the United States. It also has the nation’s highest electricity prices, often between 3 and 4 times the national average over the last decade. These high prices, the state’s sunny and windy climate that make it amenable to increasingly economical renewable energy, plus a relatively progressive political culture have pushed the state to adopt an ambitious goal of being 100 percent renewable by 2045. Focusing mainly on the state’s largest grid on Oahu, where most people live, we discuss the cost structure of the current electricity system, the potential benefits and challenges of growing the share of renewable energy, and make a few policy suggestions. In particular, we argue that all homes and businesses should be given an opportunity to buy and sell electricity at the marginal cost of generation. Variable pricing could greatly reduce the cost of renewable energy, and perhaps seed development of Hawaii as a technology center focused on batteries and smart machines that can help shift electricity demand to align with the variable supply of solar and wind energy.
UHERO County Forecast: Neighbor Island Tourism Still Has Room to Grow
After a rather soft 2014, the counties are poised for better performance over the next several years. Tourism will see additional healthy gains on the Neighbor Islands for the next two years, before rising occupancy and costs begin to bring down growth rates, something that has already occurred on Oahu. Construction, which has disappointed so far, will become a significant contributor to growth. Gains in employment have brought unemployment rates down substantially, and moderate expansion of jobs and income will continue, helping to solidify the local spending leg of the economic expansion.
Hawaii News Now: Carl Bonham on Sunrise with Howard Dicus
Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates and SO2
Kılauea volcano is the largest stationary source of SO2 pollution in the United States of America. Moreover, the SO2 that the volcano emits eventually forms particulate matter, another major pollutant. We use this exogenous source of pollution variation to estimate the impact of particulate matter and SO2 on emergency room admissions and costs in the state of Hawai‘i. Importantly, our data on costs is more accurate than the measures used in much of the literature. We find strong evidence that particulate pollution increases pulmonary-related hospitalization. Specifically, a one standard deviation increase in particulate pollution leads to a 2-3% increase in expenditures on emergency room visits for pulmonary-related outcomes. However, we do not find strong effects for pure SO2 pollution or for cardiovascular outcomes. We also find no effect of volcanic pollution on fractures, our placebo outcome. Finally, the effects of particulate pollution on pulmonary-related admissions are most concentrated among the very young. Our estimates suggest that, since the large increase in emissions that began in 2008, the volcano has increased healthcare costs in Hawai‘i by approximately $6,277,204.
Sumner La Croix on PBS Hawaii Insights: Will Our Children Ever Be Able to Afford to Live in Hawaii?
There seems to be no end to the rising cost of living in Hawaii. The high prices of housing, groceries, gas and other necessities make it more and more difficult for us to live in today's paradise. But what about our children? If it's this hard to make ends meet now, what will life in Hawaii be like for future generations? UHERO's Sumner La Croix joins Daryl Huff and guests on Insights on PBS Hawaii to discuss how these issues impact the islands' middle class residents.
Economic Impact of the Natural Energy Laboratory Hawaii Authority Tenants on the State of Hawaii
The Natural Energy Laboratory Hawaii Authority (NELHA) contracted UHERO to estimate its economic impact on the State of Hawaii. NELHA currently accommodates 37 tenants ranging from companies bottling deep sea water to solar and biofuel companies. These tenants pay close to $2 million in rent, royalties and pass through expense directly to NELHA. In addition, they employ hundreds of people, purchase goods and services from local businesses, and invest in capital improvements at NELHA.
This research determines NELHA’s contribution to local business sales, employee earnings, tax revenues, and number of jobs in Hawaii from the expenditures of its tenants in 2013. NELHA provides additional benefits to the state of Hawaii that this study does not capture but are important to consider when evaluating NELHA’s overall footprint on the economy.
UHERO State Forecast Update: Hawaii on Steady Course for 2015
The Hawaii economy in 2015 will look a lot like last year’s. Tourism will see only marginal gains, but steady labor market improvement will continue, and there will be moderate income growth. While not all damage from the past recession has been repaired, by many measures economic activity in the state is returning to normal.
A summary of this forecast is available as a service to the public. For more detailed analysis, subscribe to UHERO's Forecast Project.
Creating "Paradise of the Pacific": How Tourism Began in Hawaii
This article recounts the early years of one of the most successful tourist destinations in the world, Hawaii, from about 1870 to 1940. Tourism began in Hawaii when faster and more predictable steamships replaced sailing vessels in trans-Pacific travel. Governments (international, national, and local) were influential in shaping the way Hawaii tourism developed, from government mail subsidies to steamship companies, local funding for tourism promotion, and America’s protective legislation on domestic shipping. Hawaii also reaped a windfall from its location at the crossroads of the major trade routes in the Pacific region. The article concludes with policy lessons.