The Economics of Dead Zones: Causes, Impacts, Policy Challenges, and a Model of the Gulf of Mexico Hypoxic Zone

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Rabotyagov, Sergey
Kling, Catherine
Gassman, Philip
Rabalais, Nancy
Turner, R.E.
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Center for Agricultural and Rural Development

The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.

CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.

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This article reviews and analyzes the issues related to worldwide hypoxic zones and the range of economic questions sorely in need of answers. We begin by describing the extent and causes of hypoxic zones worldwide, followed by a review of the evidence concerning ecological effects of hypoxic zones and their impacts on ecosystem services. We describe what is known about abatement options and cost-effective policy design, and then focus on the large seasonally recurring hypoxic zone in the Gulf of Mexico. We offer a simple econometric model to estimate the relationship between pollutants (nutrients) and the size of the hypoxic zone. This “production function” relationship suggests that both instantaneous and historical nutrient contributions affect the size of the zone. Our results support concerns that ecologists have raised about lags in the recovery of the ecosystem and confirm the importance of multiple nutrients as target pollutants. We conclude with a discussion of the types of research and cooperation across disciplines that are needed to support the development of policies to address this important ecological and economic issue.


This is a working paper of an article from Review of Environmental Economics and Policy 8 (2014): 58, doi:10.1093/reep/ret024