for the period 01/01/2000 to 12/31/2000

CRIS Research Reports In-Progress for NH. - Agricultural Exper Sta, Univ of

New Hampshire

AD-421 Reports in-Progress for NH. as of 03/16/2001

for MORRIS by Project Number

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Project Number: NH00381

CRIS Number: 0172810

Multi-State Project: NE-162

RURAL ECONOMIC DEVELOPMENT: ALTERNATIVES IN THE NEW COMPETITIVE

ENVIRONMENT

Investigators: Morris, D. E.

Performing Department: RESOURCE ECONOMICS -- 0780

Start Date: 10/01/1997 Termination Date: 09/30/2002

Reporting period: 01/01/2000 to 12/31/2000

Progress Report:

Employment and earnings changes by industrial sectors were delineated and

compared for New Hampshire and New York over the 1969 to 1999 period.

Though both states are part of the northeast region, they differ in

geographic size, population, industrial mix, relative growth rates, fiscal

policies, and overall government philosophy. The 128.9% growth in

employment for New Hampshire versus 21.7% in New York over this time

period attests to one of these differences, not withstanding the sizable

base differences. Despite that difference in overall growth, both states

have the same two sectors comprising the largest two shares in employment,

services and retail trade. In terms of earnings the two states differ

slightly, with services and F.I.R.E being the top two largest and New

Hampshire with services and durable manufacturing being the top two.

Growth and declining sectors are compared as well. New York had five of

the eleven major sectors experiencing a decline in employment, while in

New Hampshire only the nondurable manufacturing sector lost jobs.

Portfolio analysis was used to estimate risk and return coefficients from

the various sectors for each state with comparisons made to the overall

U.S. economy. This analysis on employment reveal that both states have

higher returns over time than the United States and higher than a

hypothetical non-diversified economy for 1999. Risk had a different

result. The non-diversified mix had the highest risk coefficient. As to

the states, New Hampshire enjoys the highest returns along with higher

risks. Similar results were found for the earnings analysis. One

particular New Hampshire sector, food processing, was surveyed. This

sector has seen many new entrants lately, often in specialized niche

markets. Since many are small startups, they are invisible in Census or

BEA statistics. Our survey found the median sales to be $10,000 with 83%

using direct marketing, 12% having a business plan, and 16% maintaining a

web site. Nearly half of the firms deal with maple syrup and products. A

logit model was used to estimate the probability of sales exceeding

$10,000. Advertising and promotion expenses, age of operator, and

employment status of owner all had significant coefficients at the 0.10

level or better.

Publications:

Edmund F. Jansen, Jr, and Douglas E. Morris, June 2000. "Strafford County

Jail Expansion Costs and Impacts," RED Paper, 2000-01, Department of

Resource Economics and Development, University of New Hampshire.

Alberto B. Manalo, Douglas E. Morris, and Michael S. Garrepy. October

2000. " Food Processing in New Hampshire: Who, Where, How Big, and So

What?", Abstract, Agricultural and Resource Economics Review, Volume 29,

Number 2.

Impact:

The sector by sector return and risk coefficients that vary widely and

should be of interest to state and local agencies engaged in economic

development programs. As the State of New Hampshire debates adding a

possible sales or income tax to fund education, these delineated results

of job and earnings growth should be a welcome addition.

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