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Hawaii News Now: Carl Bonham on the State Forecast Update

Posted February 27, 2015 | Categories: Media

UHERO Executive Director and Professor of Economics Carl Bonham appears on Sunrise with Howard Dicus to discuss UHERO's latest State Forecast Update: Hawaii on Steady Course for 2015.



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.

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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.


Chamber of Commerce Hawaii: State of the Economy Presentation

Carl Bonham presented this 2014 economic recap and 2015 forecast on January 20, 2015 at an event hosted by the Chamber of Commerce Hawaii.

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Why Are There So Few Women in Executive Positions? An Analysis of Gender Differences in the Life-Cycle of Executive Employment

“Glass ceilings” and “sticky floors” are typical explanations for the low representation of women in top executive positions, but a focus on gender differences in promotions provides only a partial explanation. We consider the life-cycle of executive employment, which allows for a full characterization of the gender composition of executive management. We establish that there are few women in executive management because they have lower levels of human capital, are underrepresented in lower-level jobs, and are less likely to be perceived as high-productivity employees. We do not find that women have uniformly unfavorable promotion and demotion probabilities.


Benefit-Cost Analysis of Watershed Conservation

The objectives of this report are (1) to review studies that estimate the relationship between watershed conservation activities and groundwater recharge in Hawai‘i and (2) to estimate the volume of freshwater yield saved per dollar invested in conservation at several sites on Hawai‘i Island. We conclude from the literature review that more work should be done to integrate information from smaller-scale studies of invasive-native water use differences into regional water balance models. This would help to inform decisions related to watershed conservation activities statewide. Using budget information obtained from the Nature Conservancy and the Division of Forestry and Wildlife as well as publicly available landcover and evapotranspiration (ET) data, we estimate the gallons of freshwater yield saved per dollar invested in watershed conservation. Under baseline conditions—a 3 percent discount rate and a 10 percent rate of spread for existing invasive plant species—roughly 400 gallons are saved on average across management sites per dollar invested. In other words, about $2.50 in present value terms is required to protect every one thousand gallons of freshwater over a 50 year time horizon. Annual benefits increase continuously as the avoided loss of freshwater yield rises over time, while conservation costs tend to be front-loaded, as a result of high fence installation and ungulate removal costs. Thus, it is important to consider the long run when comparing the benefits and costs of conservation activities.

working paper

The Economic Impact of Astronomy in Hawai‘i

The astronomy sector in Hawaii generates economic activity through its purchases from local businesses, its payment to its employees, and spending by students and visitors. In collaboration with the Institute for Astronomy, a survey was designed to obtain information from astronomy related entities about in-state expenditures. The collected survey data was used to estimate the astronomy sector’s total economic activity in each of Hawaii’s counties for the calendar year 2012. Following a standard Input-Output approach, we define economic impact to be the direct, indirect, and induced economic activities generated by the astronomy sector’s expenditures in the state economy, taking into account inter-county feedback and spillover effects.

Local astronomy related expenditures in calendar year 2012 were $58.43 million, $25.80 million, $1.28 million, and $2.58 million in Hawaii, Honolulu, Kauai, and Maui counties respectively. Total astronomy related spending in the state was $88.09 million. Including indirect and induced benefits and adjusting for inter-county feedback and spillover effects, the astronomy sector had a total impact of $167.86 million statewide. The largest impact was found to be in Hawaii County ($91.48 million), followed by Honolulu County ($68.43 million). Impacts were found to be relatively small in Maui County ($5.34 million) and Kauai County ($2.61 million). In addition to contributing to output, astronomy activities generated $52.26 million in earnings, $8.15 million in state taxes, and 1,394 jobs statewide.


Benefits and Costs of Implementing the IAPMO Green Plumbing and Mechanical Code Supplement in Hawaii

We calculate the benefits and costs of implementing the International Association of Plumbing and Mechanical Officials (IAPMO) 2012 Green Plumbing and Mechanical Code Supplement (GPMC) for various building types in Hawaii, with particular emphasis on water-use efficiency provisions in the code. Benefits of the GPMC are measured as water savings, where baseline usage is estimated in accordance with the 2012 Uniform Plumbing Code (UPC), which has been recently adopted by the state and will soon be adopted by the counties. We also monetize those benefits at the household level (water bill savings) and at the state level (cost savings to the water supply boards and departments throughout the state). Based on discussions with plumbers, building contractors, developers, architects, mechanical engineers, planners, and other water specialists, as well as an assessment of prices at major home improvement stores and other online retailers, we estimate the costs of GPMC compliance for new structures planned for Hawaii over the next decade. If the GPMC is implemented, the payback period is two years and the net present value assuming a discount rate of zero is $15.13 million. For a discount rate of 5%, the NPV is $11.29 million.


The Conversation: Byron Gangnes on the Asia-Pacific Forecast

Posted December 8, 2014 | Categories: Media

UHERO Senior Research Fellow and Professor of Economics Byron Gangnes appears on The Conversation to talk about UHERO's State Forecast Update: Hawaii's Economy in Need of an Engine.



UHERO Asia-Pacific Forecast: Moderate Regional Growth Faces Rising Risks

Posted December 4, 2014 | Categories: Forecasts

The Asia-Pacific economy slowed this year, and only slight acceleration is expected in 2015. While US economic conditions are steadily improving, Japan has had to delay for now additional tax hikes after the first one prompted contraction. Lower oil prices will be an overall plus for the global economy, even if they pose challenges for commodity exporters. China’s structural transformation and the eurozone’s struggle to move onto a satisfactory growth path continue to hold back global trade. This limits prospects for exportdependent East and Southeast Asia.

A summary of this forecast is available as a service to the public. For more detailed analysis, subscribe to UHERO's Forecast Project.

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UHERO Brief: An Economic and GHG Analysis of LNG in Hawaii

Hawaii currently meets the majority of its electricity needs through oil-fired generation – causing rates to be nearly four times the national average. In response to rising oil prices and in line with State-led action combating climate change, Hawaii is aggressively pursuing alternative sources of energy for its electric sector. Hawaii’s Renewable Portfolio Standard (RPS) states that utilities must meet 40% of electricity sales with renewable sources of energy by the year 2030; however, the remaining 60% can come from fossil fuels. Lower natural gas prices as a result of the “shale gas revolution” is in part why the State and key stakeholders are deliberating importing large amounts of natural gas in liquefied form (liquefied natural gas or LNG) for use in the electric sector.

This study builds upon past Hawaii-based LNG studies and extends the analysis by assessing both the macroeconomic and electricity sector impacts of using natural gas for power generation. We draw upon two recent studies, by Facts Global Energy (2012) and Galway Energy Advisors (2013) for price estimates. In addition to economic outcomes, this study estimates GHG emissions impacts as well as qualitatively discusses other environmental impacts related to the extraction of natural gas.



Read the full report here

An Economic and GHG Analysis of LNG in Hawaii

Hawaii currently meets the majority of its electricity needs through costly oil-fired generation causing rates to be nearly four times the national average (EIA, 2013a). The "shale gas revolution" has led to rapidly declining natural gas prices within the continental U.S. The emergence of a natural gas market that is de-linked from oil prices has renewed Hawaii's interest in natural gas imports. Potentially lower natural gas prices as well as the view that it will help to reduce green house gas (GHG) emissions and increase energy supply security through domestic sourcing are major reasons why the State and key stakeholders are deliberating over importing large amounts of natural gas in liquefied form (liquefied natural gas or LNG). This study uses detailed models of Hawaii's electric sector and overall economy to estimate the impacts of Hawaii importing LNG for use in the electric sector.


The Conversation: Peter Fuleky on the State Forecast Update

Posted October 24, 2014 | Categories: Media

UHERO Research Economist and Assistant Professor of Economics Peter Fuleky appears on The Conversation to talk about UHERO's State Forecast Update: Hawaii's Economy in Need of an Engine.



Why Does Real-Time Information Reduce Energy Consumption?

A number of studies have estimated how much energy conservation is achieved by providing households with real-time information on energy use via in-home displays. However, none of these studies tell us why real-time information changes energy-use behavior. We explore the causal mechanisms through which real-time information affects energy consumption by conducting a randomized-control trial with residential households. The experiment disentangles two competing mechanisms: (i) learning about the energy consumption of various activities, the “learning effect”, versus (ii) having a constant reminder of energy use, the “saliency effect”. We have two main results. First, we find a statistically significant treatment effect from receiving real-time information. Second, we find that learning plays a more prominent role than saliency in driving energy conservation. This finding supports the use of energy conservation programs that target consumer knowledge regarding energy use.

Published version: Lynham, J., Nitta, K., Saijo, T., & Tarui, N. (n.d.). Why does real-time information reduce energy consumption? Energy Economics. http://doi.org/http://dx.doi.org/10.1016/j.eneco.2015.11.007

Working Paper



UHERO State Forecast Update: Hawaii's Economy In Need of An Engine

Posted October 14, 2014 | Categories: Forecasts

Prospects for Hawaii growth remain muted. Despite a pickup over the summer, visitor arrivals have been soft this year, and the period of robust visitor spending increases is behind us. A mixed global economic environment and limited visitor industry capacity will keep a lid on future gains. While the construction expansion continues, it does so at a slower pace than anticipated and has created few new jobs in 2014. The building trades nevertheless remain the most likely drivers of expansion over the next several years.

A summary of this forecast is available as a service to the public. For more detailed analysis, subscribe to UHERO's Forecast Project.

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