Can public policy help the United States kick its soda habit?

When I was in graduate school at UC Berkeley, one of the policies that we were getting evidence of at the time was a new policy that was being implemented in local governments in the Bay Area. This was the taxation of sugar-sweetened beverages. In the media, these are often referred to as a “soda tax.”

While taxation of sugar-sweeted beverages is a potential revenue source for local governments, the key justification for the policy was based on public health. In particular, policymakers argue that taxation of sugar-sweetened beverages discourages their consumption and could be a tool for curbing the obesity associated with them.

Obesity is considered by many in the public health community to be a rising epidemic in the United States. Obesity is associated with heart disease, diabetes, sleep apnea, cancer, and fatty liver disease. According to the Centers for Disease Control and Prevention, about two in five Americans are obese.

At Scioto Analysis, one of the frameworks we use for policy analysis is human development. Broadly, the human development framework argues that a society built on human freedom requires certain basic goods that help people live the multitude of lives they wish to live. Measurements of human development like the Human Development Index focus on three major basic goods: income, health, and education. The idea is that any conception of the good life will require income to purchase goods, health to use your body and mind to pursue activities, and education to contribute to your own well-being and the well-being of others.

So the public sector has an interest in promoting health. How have they undertaken that interest by targeting soda?

One high-profile example of public policy taking aim at sugar was the 2012 soda cup regulation proposed by Mayor Michael Bloomberg of New York. Bloomberg proposed that cups filled with soda sold in the city would be limited to 16 fluid ounces as a way to discourage excessive consumption. While the law was struck down by a state court before it went into effect, the proposal became infamous as an example for many of the overreach of public health policy into the lives of individuals.

Regulation of sugar is still alive and well in 2025. Last month, Governor Mike DeWine of Ohio announced his intention to ban the use of SNAP benefits on soda and sugary drinks. Some saw this as paternalistic and others pointed out that many families are likely to simply shift their spending of SNAP benefits to other groceries and buy soda with their own money. Others saw it as a step for promoting healthy lifestyles for a segment of the population that has higher rates of obesity, at least among women.

This comes a decade after many school districts across the country banned soda in schools. These bans seem to show some impacts on consumption of soda and sugar-sweetened beverages by children.

The underlying tension in the public policy sphere should be becoming clear to you here. On the one hand, we have human development. People need to be healthy to pursue the experiments of living they wish to choose. On the other hand, many of the policy tools we use to curb soda are at least slightly paternalistic. This means that the government is, in a small way, limiting the experiments of living people can carry out.

As policy analysts, the way we would model the costs of these policies is through economic analysis. The benefit of economic analysis is that it gives us a framework for modeling desires and their strength. Policies like taxes on sugar-sweetened beverages, regulations on sizes of cups, limits on what SNAP benefits can be used on, and banning of soda in school can be analyzed using microeconomic models to estimate what the aggregate loss of welfare is that arises from policies.

There are complications that occur when it comes to consumption. A body of evidence suggests that sugar consumption leads to addiction that looks neurologically similar to drug abuse. If this is the case, then some key assumptions of our models of rational consumption start to break down. Right now, we are working with an intern on a cost-benefit analysis of cigarette taxes in Ohio. The evidence of the addictive properties of nicotine is much more well-worn than the evidence of sugar addiction, and we are still finding economic modeling of cigarette addiction and policy interventions to curb it challenging. Incorporating sugar addiction into an economic model would be a challenge entirely of its own.

Another place I am interested in the impact of this policy is on subjective well-being. I consider this the frontier of public policy: how does public policy impact how we assess our own lives? According to the Mayo Clinic, soft drinks are a cause of obesity and obesity can lead to symptoms such as depression, disability, shame, guilt, social isolation, and lower work achievement. If regulation of sugar-sweetened beverages can lead to lower consumption and if lower consumption leads to lower obesity rates, this could also help curb these quality of life symptoms and could improve subjective well-being. I would like to see some more evidence, though, to see if this is the case.

Across the United States, the average American consumes dozens of gallons of soda per year. There is a substantial variation between regions of the country, though. The average Hawaiian consumes less than two dozen gallons of soda per year. The average Missourian, on the other hand, consumes over four dozen gallons of soda per year. This suggests that there could be greater yields for state governments in different parts of the country. Given that the top 14 states with the highest per-capita consumption are Midwest or Appalachian, the regional trends suggest a place to start.

Ultimately, it will be up to policymakers to decide how to trade off public health and paternalist considerations in the regulation and taxation of soda. In the meantime, analysts like us can help them understand these impacts quantitatively. Creating a better framework for understanding the potentially addictive nature of sugar could go a long way to helping promote public health while still allowing for personal choice.

How to get census data during the government shutdown - or any other time

With the ongoing government shutdown, anyone who has tried to use a website maintained by one of the many federal agencies has encountered difficulties. Some of these obstructions are due to the fact that these websites probably aren’t being maintained as normal, while some are simply unnecessary roadblocks.

The main example I want to talk about today is data.census.gov, the online portal many analysts use frequently to get data collected by the Census Bureau, particularly American Community Survey data. 

The notice on the top of the website says that inquiries won’t be answered until appropriations are made. As far as I can tell, there’s no reason you shouldn’t be able to query this website during the shutdown. The data is public, and while we will certainly have to wait for appropriations before we can expect any new data to be added, we should be able to access the data that is already there. 

The good news is that there are ways you can get this data if you have some technical chops. I’m going to briefly explain two methods you can use to get American Community Survey data during the shutdown. 

IPUMS  

If you work with American Community Survey data, you should be aware of IPUMS. They provide individual survey responses to a wide range of surveys in the United States and abroad, with the American Community Survey included. 

This is a useful resource because their website makes it easy to get the data you need. You can shop around for different survey questions and make yourself a bespoke dataset that has all the information you need without any fluff. 

The main catch with IPUMS data is that because it is individual survey responses rather than aggregated results, you need to calculate any summary statistics yourself. If your goal is to find out the poverty rate in Wisconsin, you need to get all the respondents from Wisconsin and calculate a weighted average. A benefit of getting the individual survey responses is that you can get more specific answers than you might find on data.census.gov. 

The main downside I want to point out is that because you get individual responses, it is much more difficult to get small geographic estimates. If you are dealing with geographic areas that have less than 200,000 residents, this data is going to be more difficult. 

Tidycensus

If you can code in R, then I’d highly recommend becoming familiar with the tidycensus package. This lets you directly interface with the Census Bureau’s data API. You can take any table you would otherwise search up on data.census.gov and download the results directly in R. 

Using the package is not too difficult, and the basic usage page has everything you need to get started. One thing that is frustrating right now is figuring out exactly what the code for the variable you are interested in is. Because the main website is down, this can sometimes be annoying. Normally, I’d search the variable I was interested in to figure out exactly what table to ask for and which columns/rows to draw from, but the package does have all that information in a table so you can find it with a little bit of effort.

The advantage of this method is that it entirely bypasses the fact that data.census.gov prevents people from downloading data on the front end. With the right prompt, this package gets you exactly the same data. Additionally, this has the benefit of letting us work with smaller geographic regions than IPUMS enables because the data is disaggregated. 

The existence of this API suggests that there are other ways to directly query American Community Survey data without using R. A quick google search led me to this Python library which appears to do the same thing. 

Hopefully this is helpful to someone who’s been waiting for data.census.gov to come back online. This data is important and access to it is critical for so much analysis. It is a shame that access to it has become another casualty to politics.

Survey: Majority of Ohio economists believe nuclear power will reduce energy prices

In a survey released this morning by Scioto Analysis, 13 of 18 economists agreed that encouraging development of new nuclear power generation facilities will lead to lower energy prices in Ohio. This comes as Ohio’s energy demands are going to be increasing as data centers become a larger part of the economy. In order to meet these energy demands, Ohio is going to need to increase its energy production or face rising energy rates.

One caveat mentioned by some of the economists who agreed was that there would be downward pressures on energy prices was that the high upfront cost of nuclear development would make this development more difficult. As Faria Huq from Lake Erie College noted “Basic laws of demand and supply would suggest that in the face of increasing demand, supply needs to be increased in order to keep prices low. However, given the very large fixed costs associated with developing nuclear power generation facilities, there would need to be  reliable projections of the specific energy needs of the data centers prior to investing in them. There should also be some form of commitment by the data centers to use the additional energy produced.”

David Brasington who was uncertain about the energy price impact also noted that these fixed costs might need to be passed on to consumers: “Larger supply could lead to lower prices, but the large fixed costs of a new source of energy would have to be passed on to customers, too.”

Additionally, 12 economists disagreed that encouraging development of nuclear energy facilities would substantially increase health risks for Ohio residents. As Jonathan Andreas from Bluffton University pointed out, current energy generation options already have some associated health risks: “Nuclear power has a long track record and Western plant designs have produced much, much lower rates of health problems for area residents than coal-fired plants which have killed hundreds of thousands of Americans due to pollution.  Even the worst nuclear disasters in the West, Three-Mile Island and Fukushima, killed very few people directly although there were many indirect deaths caused by the evacuations.  Those are the worst disasters in the entire global history of capitalist nuclear reactors, and the technology has been improving.”

The Ohio Economic Experts Panel is a panel of over 30 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists. Individual responses to all surveys can be found here.

Research suggests anti-LGBTQ legislation hurts state economies

A few weeks ago, I had a reporter from WYSO reach out to me about a story they were doing on the impact of anti-trans policies on the economy.

Usually, when someone asks me a question about how culture war issues impact economic development, I prepare myself to disappoint them. I tend to find a lot of knee-jerk economic arguments being made about political issues as they arise before evidence can be gathered. So while people can make theories about the economic impacts of policies as they arise, the evidence on them is often not good to make an empirical claim about the policies.

I was surprised to see how different this issue was.

The argument people make about changes like legislation to make it more difficult to receive transition care is that people who live in an area will decide to relocate or companies that want to hold events in a location will not do so due to the controversy around the ban.

We have some evidence about this around anti-trans legislation adopted recently.

In 2023, Florida Governor Ron DeSantis completed a push to pass new anti-LGBTQ legislation in Florida. In the wake of this new legislation, 17 groups cited “current Florida politics” as reasons for not booking conferences in the Fort Lauderdale area between May and September of 2023 after Governor Ron DeSantis expanded anti-LGBTQ policies. According to Stacy Ritter, CEO of Ft. Lauderdale, Florida Tourism Bureau Visit Lauderdale, these boycotts alone led to a loss in revenue of $98 million for the community.

A 2016 law in North Carolina forbade state and local governments from making bathroom accommodations for transgender residents. Dubbed the “bathroom bill,” this bill led to nationwide boycotts of the state of North Carolina. In an Associated Press analysis, journalists estimated these boycotts cost the state of North Carolina $3.8 billion.

Now there are reasons to be skeptical of some of these numbers. Whether all the events that claimed they were skipping Florida or North Carolina were doing so only because of the political climate is up for debate. But even if only a quarter of these events that claimed to be finding other locations due to volatile legislation actually did so, that would amount to tens of millions of dollars in Fort Lauderdale and hundreds of millions of dollars in North Carolina.

Another analysis was done by Lee Badgett, an economist at the University of Massachusetts Amherst. Badgett estimates that anti-LGBT laws and discrimination cost as much as 1% of a country’s gross domestic product.

How could discriminatory legislation lead to such wide-ranging economic impacts? Badgett argues that the reason is that more open societies lead to more dynamic economies.

Take education. There is a well-known association between education and earning potential: more years of education is associated with greater earning potential for workers. In places where LGBTQ students are likely to drop out of school, their earning potential is curbed, meaning less human capital in the workforce and fewer opportunities for employers to find people to match their workforce needs.

This workforce problem does not stop with education. Discriminatory practices by companies can lead to LGBTQ people working in hostile environments or in extreme cases being fired due to their sexuality. This leads to further skill mismatches which are a drag on the economy. If someone is the most qualified for a job but cannot work there due to a hostile environment, companies have to hire lower-quality workers to fill those roles.

Discriminatory legislation can even impact investment decisions. A 2021 report from business coalition Open for Business found that countries that criminalize homosexuality have rates of foreign investment less than a quarter of other countries. There is certainly a correlation vs causation problem here: investors are likely not making their decisions solely on the basis of laws around the criminality of homosexuality. Scrubbing the books of these laws would probably not lead to a quadrupling of foreign investment overnight. But Badgett’s point stands: openness to different lifestyles goes hand-in-hand with open economies. When a government is closed to certain types of lifestyles, they are also making it harder for businesses to do their work.

Another way anti-LGBTQ legislation impacts economies is through tourism. Outside of the explicit boycotts like what we saw in Florida and North Carolina over the past decade, many individual tourists are dissuaded from visiting certain locations due to anti-LGBTQ legislation. If people are traveling to a place for a vacation–to relax–they want to be somewhere that minimizes the likelihood of harassment. Discriminatory legislation at the very least signals a closed community and at the worst could leave people vulnerable to harassment or violence due to their lifestyle.

So it seems anti-LGBTQ legislation is bad for state economies. Could more protections for LGBTQ residents lead to stronger state economies?

At the national level, this seems to be the case. Analysis by researchers at UCLA found that one additional right for LGBTQ residents is associated with both $1,400 higher gross domestic product per capita and a higher human development index score. 

We also see this at the state level. The Indiana Economic Development Coalition found that nearly 83% of economic investment commitments and 58% of new high-wage jobs were awarded to municipalities with human rights ordinances that protect gay and transgender people from discrimination. A study by Wells Fargo found that states with larger LGBTQ populations had higher rates of economic growth and that LGBTQ individuals were overrepresented among the ranks of entrepreneurs. So making state environments more attractive for LGBTQ individuals can lead to more dynamic and strong state economies.

Legislation seems to have an impact on these economies, too. States with anti-discrimination legislation in place have higher employment rates for LGBTQ residents. Trans people with more workplace acceptance have greater job satisfaction, lower anxiety, and can be more productive, innovative, and loyal. One analysis even found anti-transgender legislation led to health complications down the road for trans individuals that cost tens of thousands of dollars per case in future treatment costs due to depression, substance abuse, and suicide.

The weight of the literature suggests that open policies lead to open economies, and open economies lead to stronger businesses, higher wages, and more employment. In the case of anti-LGBTQ legislation, it does seem that legislation can have a significant impact on state economies as a whole.

What is the impact of homeless shelters?

Part of the mission at Scioto Analysis is to improve public policymaking. Although we always strive for the best possible outcomes, we understand the limitations of our kind of work and we only promise better decisions, not necessarily the best decisions. A theoretically perfect policy would have all benefits at zero cost. As economists like to say, there’s no such thing as a free lunch.

I was thinking about this philosophy recently as I read a new working paper by a team of economists from Stanford. They looked at the impact that homeless shelters had on the population, and they found that shelters were not significantly more effective than other interventions at reducing homelessness. 

While shelters may not be effective at reducing homelessness relative to other (presumably less costly) interventions, the researchers did find that there were a wide range of other benefits both for people receiving shelter and the community at large.

One of the main externalities the researchers found was a reduction in crime, particularly violent crime in areas with shelters. Much of this reduction was observed among crimes that happen during the evening when shelters are operating. 

Another externality they found was a reduction in the number of emergency room visits. We know that people experiencing homelessness utilize emergency medical services at higher rates compared to the population as a whole, which can lead to negative consequences for others due to overcrowding.

The most significant benefit that accrues to people receiving shelter is a reduction in mortality. We’ve talked before about the value of statistical life, and anyone who is familiar with it knows that there is an extremely high willingness to pay for risk of death reduction in our society. Any program that reduces mortality is likely to have a significant return on investment.

If we only evaluate homeless shelters on their ability to reduce homelessness long-term, we might think that they are not worth it for the public sector. The authors mention that street outreach is about as effective at reducing homelessness, and that doesn’t require nearly as many resources. 

However, this isn’t the whole story. Shelters do more than just reduce homelessness that we as a society have a high willingness to pay for. We generally like living in cities with less crime, where the emergency room has openings for people who need it, and where people don’t die prematurely. If we only focus on one outcome, we miss the bigger picture about what shelters can provide for us. 

I think this provides a clear example of why Scioto Analysis is focused on better decision making rather than perfect decision making. If your goal is to end homelessness in your city, then shelters might not be the best approach. The evidence suggests that in the long run they will not solve the problem. 

But they can make it better. What shelters seem to be is a way to treat the symptoms of homelessness, not its causes. But they are very effective at treating these symptoms.

Policy analysts and policymakers can keep looking for solutions that are even better than shelters for addressing homelessness, but right now it appears to be one of the most efficient tools we have.

Modeling Rational and Irrational Cigarette Consumption

Decades of public health research have established that cigarette smoking exacts costs on smokers, the people around them, and the environment. In a classic, rational economic model, we would assume that individuals’ consumption of cigarettes is based on the understanding of those negative effects. Smokers know that they have an increased chance of getting lung cancer or heart disease, or that their children and spouse do if they smoke around them. Theoretically, then, smokers choose to consume an amount that factors in these costs. In a classic microeconomic framework, consumers maximize their utility when the costs of that consumption equal the benefits, so the consumers choose to consume the number of cigarettes that generates benefits for them they feel are equal to its cost. 

However, consuming cigarettes is not the same as consuming apples. Cigarette consumption does not happen in a vacuum–as is made clear by the effects of secondhand smoke. This classic rational economic model says that consumers only take into account their own costs, not the cost to other people. The negative externality, this additional cost to others that consumers and producers do not consider when participating in the market, is similar to the consequences of consuming many other goods. For example, firms producing energy who expel smog into the air cause climate pollution which negatively impacts everyone else, but their decision to produce the amount they do does not take this into account. There are many examples of negative externalities, and they represent a market failure. Competitive markets work great in theory, but one of the ways they fail is in the presence of an externality. 

Since so many goods exact negative externalities on society, there are tried and true methods to combat them. One example is a tax. Cigarettes are taxed by the federal government and states. Theoretically, the size of that tax would be equal to the size of the negative externality, so that people consume at the level equal to the cost to society. Instead, they overconsume, not considering these additional costs. Using secondhand smoke as the example, the size of the tax would encapsulate the cost of secondhand smoke to other people, as well as other negative effects like the cost to the public healthcare system for smokers who develop smoking-related illnesses, or the lost productivity to the economy from smokers dying earlier and not working for as long as nonsmokers.
Taxes work well at reducing smoking in this way, and as they have increased over the years, accompanied by public health campaigns and bans on smoking in most public places, cigarette consumption has greatly fallen. However, 15% of people in Ohio still smoke. The size of the tax is not actually equal to the social costs exacted by it, especially because it is not linked to inflation, so its effective value has degraded over time. 

Although taxes are successful at addressing negative externalities that harm others, cigarettes also harm individuals who consume them. In theory, people should account for these personal costs when deciding how much to smoke—but unlike non-addictive goods such as apples, cigarettes have addictive properties that can distort rational decision-making.

Many smokers begin before the age of 18, which used to be the legal age to purchase tobacco. Since the legal age has now increased to 21, anyone who starts smoking earlier is, by the judgment of the state of Ohio, acting irrationally. For example, someone who begins smoking at 15 may develop an addiction that undermines their ability to make the same rational choices they might have made later in life. As adults, they may fully understand the health risks, but their addiction constrains their capacity to respond rationally.

This means that people who are consuming cigarettes now may be making a rational decision to smoke cigarettes when it would be irrational for a nonsmoker to start: based on their addiction, they are smoking the correct amount for themselves. In the absence of addiction, they would smoke less or not at all. 

The failure to fully realize the cost of smoking to oneself is called an “internality.” If you do not fully realize how bad cigarettes are for your health, you’re going to overconsume because the “price” of cigarettes is higher than you realize. It’s likely that cigarette consumers understand the consequences to their health in some ways: public health campaigns are wide-reaching at this point and surveys of the American population show that almost everyone knows cigarette smoking is linked to cancer and other negative health outcomes. But it is also likely that they do not fully internalize these costs, perhaps because they underestimate their personal risk, feel a sense of invincibility, or are so addicted that the long-term health consequences weigh less heavily in their decision-making.

While working on a cost-benefit analysis on increasing the cigarette excise tax in Ohio, I have been thinking a lot about how to model rational smoking decision-making in a way that (1) isn’t paternalistic, and (2) appeals to the large body of literature finding that people overconsume cigarettes. During that search, I came across a model in the NBER Working Paper Series from 2015 (Jin, Kenkel, Liu, Wang). The authors model cigarette consumption from 1964 to 2010, comparing observed consumption with two hypothetical scenarios: one reflecting fully rational consumption and another showing how smoking might have continued without new FDA regulations.

Inherent in this model is the assumption that a consumer’s lifetime utility is a function of the health consequences of smoking, even if these consequences are not fully internalized in their decision-making. They argue that these anti-smoking health policies make consumers better off if they are not fully internalizing the health consequences of smoking, but make them worse off if they are. So, the model includes the assumption that consumers might imperfectly optimize their utility because of decision-making errors or bounded self-control, which is an individual’s limited ability to choose future rewards over immediate gratification. 

Figure 1 is the graphical depiction of the conceptual framework. This counterfactual curve, the one that represents estimated behavior if anti-smoking policies had not been enacted, is DCFt.t at price Pt, those individuals consume cigarettes at the quantity ACFt in the year t. The actual amount that individuals were observed to have consumed after these policies at that same price is AOt, represented by the curve DOt. The rational curve is the line DRt | At-1, where consumers choose a level of consumption that depends on how addicted they were in time t-1. Those individuals choose the lowest level of consumption, ARt. Rational consumers are those whose decisions are the most fully informed. Research shows that people with higher incomes and college degrees tend to smoke at lower rates and to smoke fewer cigarettes each (Ida 2014; National Research Council (US) Panel on Understanding Divergent Trends in Longevity in High-Income Countries 2010). 

The anti-smoking policies, which reduced demand, made consumer spending on cigarettes fall by the area J+K+L. Their net consumer benefits are given by the areas J+K, from the amount that spending falls minus their foregone consumption, L, at this lower value. The policies have immediate benefits, but they also are compounding: since rational consumers are making decisions based on their addictive stock in the last period, consuming fewer cigarettes in the period before will make a consumer smoke less in this period. If consumers moved to the rational curve, they would gain net benefits, G, and would forego consumption H. 

Differentiating between observed and rational consumers can help to model the internality that comes with smoking. Taxes are important to address the externality side of cigarettes–that is the effects of secondhand smoke, costs to the environment, and others–but it could also help de-incentivize individuals who, at this current moment, do not fully consider the costs of smoking to their health in the future from consuming as much as they do.

How can policymakers revitalize downtowns?

Last summer, I moved from Northeast Minneapolis to the West 7th neighborhood in Saint Paul. For many people, the Twin Cities often get lumped together as one unit, but there are some important differences between them. 

The city of Minneapolis plows alleys, Saint Paul does not. Minneapolis is part of Hennepin County which includes the surrounding suburbs while Saint Paul’s Ramsey County just contains the city. Ask people who live here though, and one thing that is sure to come up is the difference between the downtowns.

Downtown Minneapolis is much busier than downtown Saint Paul for many reasons. One simple reason is that Minneapolis is the larger city of the two, with over 100,000 more residents than Saint Paul. Also, Minneapolis is home to more of the metro’s pro sports teams (football, basketball and baseball against Saint Paul’s hockey and soccer teams). 

Depending on who you ask, you might begin to get the impression that downtown Saint Paul (and Minneapolis for that matter) is on the verge of collapse. I would argue that the truth is not so dire. 

My home is about a mile and a half from downtown. I like to walk there with my dog along the river to go to a couple of breweries when the weather is nice. During hockey season, I try to make my way for a few games if I can. 

Anyone who goes to downtown Saint Paul for something will tell you that it can get extremely crowded. Getting a table in a restaurant around the Xcel Energy Center* before a Wild game is just as hard as finding one before a Timberwolves game in Minneapolis. After the game, the bars around the arena get just as crowded as people wait for the crowds to dissipate in order to find an easier ride home. 

The biggest challenge facing downtown Saint Paul is how it operates when nothing is going on. 

Right now in Saint Paul, the future of the downtown is a major talking point. A big reason for this is that since 2020, many of the office buildings that historically brought workers into downtown are sitting vacant. If you walk through downtown on a Wednesday at 1:00 pm, you probably won’t see many people at all. 

Because this is a mayoral election year, lots of policy ideas have been tossed about for how to address this. There are lots of policies being discussed, but I wanted to talk about one particular idea that I haven't really considered before. 

Saint Paul is Minnesota’s capital, and home to a lot of state offices. One idea that people have been mulling over is trying to work with the state government to bring their workers back to downtown instead of having them work from home. 

This type of idea is more focused on reinvigorating the existing infrastructure of downtown, though it certainly wouldn’t fill every office building. 

I think this is interesting because I don’t think there is anything wrong with organizations deciding they want to work in an office space. We live in a world now where that is a feature rather than an expectation of certain professions, but if an employer decides that provides value to their business greater than the cost of rent, then they should require people to come into the office. 

This situation with state workers is a little more interesting. Instead of the state deciding if the cost of rent and worker dissatisfaction is worth the additional efficiency benefit, they can consider the broader social benefits of having office space occupied downtown. I don’t know if this tradeoff is worth it, but it is interesting to think about the idea of public employees using where they work as a policy tool to benefit certain areas. 

*Now called the Grand Casino Arena. Old habits die hard.

Are “Strong Towns” the answer to the North American economic development problem?

Last week, I had back-to-back presentations at two conferences: the Health Policy Institute of Ohio’s Health Policy Summit and the Iowa Bike Summit. I hadn’t given a talk since the Spring, and the first two I got after five months of not speaking were at two different conferences within 24 hours of each other on two opposite sides of the Midwest.

I conducted a workshop on cost-benefit analysis at the Health Policy Summit at 2pm, then flew out from John Glenn International Airport in Columbus at 9pm on Thursday, landing in Des Moines a little before midnight. But my conference was not in Des Moines, it was in Cedar Falls, Iowa, a charming town in Northeast Iowa two hours from Des Moines. So I rented a car and drove for two hours so I could try to get some rest before my presentation at noon.

While on the way, I needed to listen to something to get me in the mindset for the Bike Summit, where I would be presenting on our work on the economic impact of cycling at the county level in Iowa. I listened to a couple podcasts. One was an interview with a cyclist who had participated in a couple 200-mile single day rides (what is up with cyclists and self-punishment?). I then listened to a podcast reviewing and explaining different tire pumps hosted by engineers that went about 12 feet over my head.

After that, as my eyes were sagging trying to make the last hour to Cedar Falls, I threw on an audiobook of a book called Strong Towns: A Bottom-Up Revolution to Rebuild American Prosperity. I had heard about this as a book that presents an alternate approach to understanding how North American cities developed over the past seventy years and explaining how reworking local patterns of development can lead to more sustainable communities.

I got about a third of the way through the book and I plan to listen to the rest of it so I may have different things to say about it when I am done with it. But even in the first third of the book, the author put so much that was worth talking about.

Charles Marohn, the author, is an engineer by trade, and this comes out in his writing. His approach is smart, systematic, and creative, but also suffers from reductionist historical takes. One of the themes Marohn leans on throughout the book is that community development before the second half the 20th century was “natural” and embodied a patient, thoughtful process of trial and error that better served human well-being than the top-down approach to development that became prominent in North America over the past 70 years.

A big claim Marohn makes is that economic development under the current model is built on unsustainable models of growth. If today’s infrastructure is only maintained by building more infrastructure to attract more tax base, which leads to the need for even more infrastructure than that to attract further tax base to finance that maintenance. Marohn’s critique here reminds me a lot of the critiques of Fernando Centeno, a policy analyst out of San Antonio who has written extensively about the drawbacks of the widespread model of “economic development” as it is practiced in the United States.

Both Marohn and Centeno argue that short-sighted goals have subsumed the larger public policy goals of economic development. Marohn argues that economic development as currently practiced falls into a “you win or we lose” dichotomy, where the public sector chips in with infrastructure and economic development incentives to attract economic development, ultimately taking the hit themselves if the development never materializes or dries up over a couple of decades.

His answer to this seems to be to get the public sector out of the economic development game, which is an interesting impulse. He seems skeptical of the ability of planners to direct economic development and instead thinks that incremental development based on decisions made by businesses and residents will lead to more sustainable development patterns.

He does not argue that there is no place for the public sector, however. He accepts the general consensus that the public sector has a place to play in providing infrastructure like roads and wastewater management. But he makes a bold claim, saying that the United States has too much infrastructure. He says infrastructure is considered an asset when it should be considered a liability: a responsibility of the public sector to maintain over time. He rails against the American Society of Civil Engineers, with their annual infrastructure report cards always saying the United States does not have enough infrastructure and always encouraging the public sector to build more…so civil engineers can have more work to do.

Marohn’s proposed criteria for evaluating infrastructure development is this: will the infrastructure lead to higher or lower net revenues for the municipality building them? He encourages the use of the word “profit,” saying cities should be trying to make more money than they take in, and saying that this framework will bring discipline to urban development that they currently lack.

Marohn is opinionated. He is thoughtful: he has put a lot of work into coming to the conclusions he has come to in his analysis. He still arrives at some conclusions a bit too quickly. Clearly the “model of economic development” that existed before the second half of the 20th century was by no means perfect. I think even more clearly, reducing the test for infrastructure to “maximizing the financial position of the city” ignores a key role of the public sector: to maximize social value. Say building a bridge will get people to work quicker and ambulances to elderly people’s homes faster. This will not necessarily lead to more money for the city, but it could lead to higher social value, which is a more important goal for a city than maximizing financial position. In short, sometimes a city will take a hit on an investment in their coffers in order to grow their economy, reduce poverty or inequality, improve health or education, or increase happiness.

That being said, I tend to agree with Marohn more than I disagree with him so far. Municipal government could do a lot more to discipline their development patterns. And a part of this has to be fiscal sustainability. As much as maximizing social value needs to be the north star for any public institution, managing fiscal risk is always going to be a part of that calculation. If cities can do more to manage fiscal risk over the long-term, it will help them make their communities a place where markets are dynamic, poverty and inequality are minimized, and the populace is educated, healthy, and happy.

How can Ohio turn its international student enrollment problem around?

With school in swing for the fall, enrollment numbers at Ohio’s colleges and universities are coming together.

While all of Ohio’s public universities saw an increase in enrollment, each university also saw a decline in international student enrollment.

Wright State University had the most modest decline in enrollment, losing 4.3% of its international students.

Bowling Green University and Cleveland State University, had the largest relative losses, each losing about a third of their international student enrollment.

Enrolling international students brings benefits to the state of Ohio.

International students usually pay “sticker price,” meaning the entirety of their tuition tends to go toward supporting the state system and providing education for other students.

International students also bring new perspectives to the classroom and student organizations, helping enhance the learning experience of students from Ohio and out-of-state students who may live in Ohio after college.

International students who come to Ohio for school are also more likely to stay in Ohio afterwards, helping to counteract Ohio’s “brain drain” problem by bringing qualified people from abroad to bolster Ohio’s workforce.

While national-level headwinds are hard to overcome, Ohio has some tools in its belt to attract international students.

Ohio could create a statewide tuition and internship initiative. This could use funds to create modest reductions in tuition in priority fields: think engineering, data science, and health.

This could be paired with an internship program where universities work with Ohio employers to hire international students and keep them on after graduation.

This could help bring in international students targeted towards filling holes in Ohio’s workforce, which would lead to higher earnings and more job creation in the state in the long run.

The state could also market its universities as a single destination, rather than 14 universities under different brands.

Ohio has amenities that should make the state an attractive destination for international students: affordable cities, safety, and job opportunities in lucrative fields such as healthcare, manufacturing, logistics, and technology.

Making Ohio’s offering clear could lead to, for instance, Miami University losing more international students to places like Ohio University and less places like Michigan State.

The state could invest in reducing bureaucratic friction for international students.

Standardized driver’s license or state ID rules could make it easier for international students to get identification that can connect them to other amenities in the state.

Statewide welcome centers at airports could give new international students a place to begin as they arrive in the state.

And providing legal and visa services across universities, the system could help support international students in dealing with an increasingly fickle federal Department of State.

Finally, the state can try to help students stay in Ohio after they graduate.

An H1-B bridge program with universities as sponsoring partners could help students transition into the working world.

Requiring JobsOhio to count international talent retention as a key performance metric could also encourage companies to retain international students in the state.

International students bring vibrancy, talent, and economic vitality to the state of Ohio.

For Ohio to stay competitive in a global economy, it needs to have a global workforce. Steps like this could help it do just that.

This commentary first appeared in the Ohio Capital Journal.

What would it cost to end unemployment in America?

Unemployment is a drain on social resources. Job loss is associated with future unemployment, long-term earnings losses, lower future job quality, declines in psychological and physical well-being, loss of self-acceptance, self-confidence, self-esteem, morale, life satisfaction, goal and meaning in life, social support, and sense of control, social withdrawal, family disruption, and lower levels of children’s attainment and well-being. When people lose their jobs, those effects ripple throughout their own lives and the lives of others.

While employment does not get the attention that indicators like education and health get in composite measures like the Human Development Index, other similar measures like the Social and Economic Rights and Freedoms Index put unemployment right beside these measures as a core social outcome.

So what would it take to end unemployment forever in America?

A policy option that some have put forth to end unemployment in the United States is a job guarantee. The basic idea behind a job guarantee is that anyone who wants a job in the United States will be able to get one employed in the public sector or through programs financed by the public sector. So anyone unemployed would be able to go to the government and find work if they wanted it.

So is this feasible? And what would this cost?

Well one way to get a handle on this is to see how many people are unemployed in the United States and what it would cost to employ them. While American Community Survey data is not available at the time of the writing of this blog post due to a federal government shutdown, we can use other sources of data to estimate unemployment in the United States.

According to Google’s reporting of data from the Bureau of Labor Statistics, unemployment has hovered between 5 and 7 million Americans since 2017, with the exception of the COVID-19 recession, when mass stay-at-home orders and mandated closing of public spaces skyrocketed the unemployed population in the United States to over 23 million. During the Great Recession, unemployment spiked to 15 million. Google also reports that the United States Census Bureau estimates the median individual income in 2023 was $39,982, or about $42,000 in 2025 dollars.

Assuming we want to provide employment at half the median income (a commonly-used threshold for the definition of poverty), that would mean providing jobs with an income of about $21,000 per person.

Under “standard” unemployment over the past few years, this would amount to about $100-150 billion in annual expenses to make unemployment voluntary in the United States. During the Great Recession, it would have risen to a little over $300 billion. Under the high-water mark of the COVID-19 recession, that number would have jumped to nearly $500 billion. That is high, but would have only represented about 20% of the $1.9 trillion American Rescue Plan that Congress passed during the COVID-19 recession to stabilize the economy.

According to the Committee for a Responsible Federal Budget, there are a few policy options that could make a policy like this revenue neutral. They estimate reducing the military by 17% of its personnel would save $129 billion per year over the next ten years. They also estimate increasing the payroll tax by 1% would raise $151 billion per year. They estimate imposing an annual wealth tax of 2 percent on all net worth above $50 million and a 3 percent wealth tax on all net worth above $1 billion would raise $308 billion per year. Ending state and local tax deductions would save $104 billion per year. Increasing the corporate tax rate to 28% would raise $103 billion per year. A 5% value-added tax would raise $291 billion per year and a 10% across-the-board tariff would raise $239 billion per year. Of course they also report a range of smaller changes that could be combined to reach the $100-150 billion range.

Of course, this program becomes more expensive if you increase the pay. Making the program a median-wage program rather than 50% of the median wage increases costs to $200-300 billion per year.

These are not easy changes to make. They also are not impossible. Enacting a job guarantee could help ameliorate some of the costs of unemployment. It also could have spillover effects depending on the sorts of jobs that would be financed. Public service and care work such as elder and child care, community health outreach, education, and food security could help build human capital and promote health. Environmental and infrastructure projects like park and habitat maintenance and restoration, weatherization, local infrastructure, and renewable energy installation could enhance our natural and built environment. Community and cultural development like public art projects, historical preservation, library and museum support, and civic technology can enhance communities and instill civic pride. Public health and resilience work like contact tracing, emergency response support, and health education can help keep communities safe and healthy.

Programs could also be scaled to community needs. If needs are particularly high for a certain type of employment, wages can be increased in that job to make them more attractive to job seekers. Economists could estimate the social benefits of different jobs and use that as a basis for subsidization of jobs that create more social value.

The program could also be created as a federal-state share to promote more local buy-in and local control. If the federal government contributed 90% of the funds and the states contributed the remainder, that could bring an infusion of cash to states while still giving states a way to take part in the program and help defray federal costs.

Fiscal multipliers could rake back some of the costs of the program. By infusing millions of jobs into the economy that were not there before, people will have money in their pockets that then will be spent on goods and services in the community. The dynamic effects could reduce the overall costs of the program. On the other hand, administrative costs will tack on a little more to the costs of the program, though not likely all that much compared to the costs of paying employees. Also worth taking into account is benefits: beneficiaries would likely be placed on Medicaid, which could cause some expense, assuming they were not on it already.

There are other ways to slice the pie to estimate different numbers for this program, but a conservative program to end unemployment in the United States forever would cost about $100-150 billion in normal years, rising to $300-500 billion in recessionary periods. It is up to policymakers whether this would be worth the cost, but it is certainly not impossible.