Introducing Tess Stafford, Senior Lecturer, School of Economics, UNSW Business School

Tess Stafford’s interest in environmental economics began at a young age. She grew up in Key West, Florida, as the daughter of commercial lobster fishermen, and witnessed the lobster industry becoming more and more regulated as the years went by. Tess noticed that some of the new regulations were grounded in economic theory while others were not—and some improved the industry while others appeared to have devastating effects.  The experience taught Tess the importance of carefully choosing policy tools and spurred her interest in environmental economics.

Tess is a Senior Lecturer in the School of Economics, UNSW Business School, and describes her research as focusing on ‘policy-driven questions that lie at the intersection of environmental, natural resource, and labour economics’.  She uses a variety of datasets and sophisticated techniques to identify the intended and unintended effects [or consequences] of public policies, providing sound evidence of the efficacy of public policy that is useful to policy makers. Tess Stafford fishing with her mother in Key West, Florida

Tess says that she finds her research both stimulating and rewarding.

“Economics provides a rigorous approach to examining human behaviour, something inherently fascinating,” says Tess.

“I find environmental economics particularly interesting since most environmental settings exhibit some type of market failure, often requiring governmental intervention to correct the failure.”

Her recent research in the water space looks at fisheries, showing how effective fishery management policies must consider the strategic behaviour of fishermen.  

With many marine species becoming overfished, marine protected areas (MPAs), which typically restrict or prohibit commercial fishing, are becoming an ever-growing tool for ecosystem management. Supporters advocate that MPAs have the potential to improve ecosystems and even increase the productivity of fisheries by creating safe havens where exploited fish stocks can recover and repopulate non-protected areas, but Tess’ research demonstrates that assumptions about these fishermen may be resulting in inaccurate forecasts.

“Favourable forecasts on the effectiveness of MPAs are often based on models that make unrealistic assumptions about the behaviour of fishermen, including that fishermen can only target one species,” says Tess.

“In "Accounting for Outside Options in Discrete Choice Models: An Application to Commercial Fishing Effort" (2018, Journal of Environmental Economics and Management), I demonstrate that failure to model secondary species results in distorted parameter estimates and misleading policy forecasts. In particular, I show that MPAs designed to protect one species can have the unintended consequence of leading to the exploitation of other species.”

Together with colleague Scott French, also a lecturer in the School of Economics, Tess is currently using a fisheries dataset to try to distinguish between models of labour supply. 

In the paper “Returns to Experience and the Elasticity of Labor Supply”, Tess and Scott demonstrate that ‘returns to experience’—the notion that your wage or salary increases with your work experience—play an important role for workers when deciding how many hours to work each day. They have determined that models that ignore this idea produce downward biased estimates of the response of labour supply to changes in remuneration.

Economics provides a rigorous approach to examining human behaviour, something inherently fascinating

Tess Stafford, Senior Lecturer, School of Economics, UNSW Business School

“Our results are important for several reasons,” says Tess.

“First, they suggest that workers are much more responsive to changes in remuneration than suggested by much of the empirical micro-based literature.  Second, labour supply models with returns to experience generate starkly different predictions about behaviour than the standard model with exogenous wages, and our novel estimation strategy provides new and largely model-free evidence of the importance of returns to experience in models of labour supply.”

Throughout her career, Tess has published a number of successful papers, with two in particular standing out as clear highlights. Her paper “What Do Fishermen Tell Us That Taxi Drivers Do Not? An Empirical Investigation of Labor Supply” is becoming an integral part of the literature on labour supply and is taught to PhD students at a number of institutions around the world—including at MIT—and “Indoor Air Quality and Academic Performance" has been mentioned a number of times on twitter and in blogs, and is regularly cited in papers in engineering, built environment, and health journals.


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