4th annual New Mexico Economics Research Day highlights projects impacting state

The 4th annual New Mexico Economics Research Day, hosted by the University of New Mexico Department of Economics, was held recently featuring five research projects that have a direct impact on New Mexico.

UNM's annual Economic Research Day provides researchers an opportunity to report and discuss the results of their findings to the legislators who fund the work, state officials and other community stakeholders, several of whom attended N.M. Economics Research Day. The projects are designed to investigate an economic or policy-related topic impacting the state.

"This event and the presence of so many different stakeholders and constituents really remind us that research is not just a university priority, but it's also a priority for the state and for our country and for the world," said Jennifer Malat, dean, College of Arts and Sciences. "We're not only proud of the scholarship and research that our people produce, but also the ways that they contribute this research to a better society and to contribute to our state of New Mexico.

"At UNM, the first goal of the strategic plan UNM 2040 is Advance New Mexico. That goal contributes to the life growth, prosperity, and advancement of New Mexico. The College of Arts and Sciences also has a strategic plan. One of our overarching values is community engagement rooted in New Mexico with a global reach. This event today is an example of all of those goals and values in action."

This year's projects covered a range of topics affecting the state from water to solar energy, and oil and gas to wildfire

"The presentations today are from the fiscal year 2025 projects for the New Mexico centric economic research study in the department," said Melissa Binder, chair, department of economics. "We are grateful to the New Mexico State Legislature for funding this work through the higher education research and public service projects process and appropriation.

"The presentations showcase the work of EconFABNM-Economics Research for a Better New Mexico-a fantastic program that funds projects of pressing concern for policy and economic development in our state. The program benefits both the state and our students. The state receives cutting-edge research, and the students build their skills while being of service to the state."

"This event and the presence of so many different stakeholders and constituents really remind us that research is not just a university priority, but it's also a priority for the state and for our country and for the world,"

- Jennifer Malat, dean, College of Arts and Sciences

The Impact of Market Structure and Utility Incentives on Solar PV Adoption in New Mexico
Researchers includeAssistant Professor Yuting Yang; Graduate Student Assistant Jiaqing Zhao, Ph.D. candidate; and Undergraduate Student Assistant Rhoan McMaster.

Led by Assistant Professor Yuting Yang, this research study explored residential solar adoption in New Mexico as part of the state's renewable energy strategy, focusing on market dynamics and policy impacts on installation costs. Despite declining solar technology prices and incentives, significant cost disparities exist across communities. The research examines how market concentration including two policies-the Investment Tax Credit (ITC) and Net Energy Metering (NEM)-shape these outcomes.

The research findings show that in New Mexico, higher market concentration (measured by HHI) correlates with higher installation prices only in urban, highly concentrated markets, while rural or moderately concentrated markets see little to no effect. Nationally, however, concentration consistently raises prices. The ITC encourages firm entry, lowers concentration, and reduces costs, especially in concentrated markets. In contrast, NEM reduces competition by limiting the number of active firms, leading to increased concentration without significant price reductions. Importantly, NEM program design also affects consumer choices: credit rollover structures incentivize larger rooftop systems, whereas monthly true-up designs lead to smaller installations.

Overall, the study highlights how market structure and policy design jointly shape solar affordability and adoption, with implications for ensuring equitable access to solar energy in New Mexico's clean energy transition.

The Impact of Energy Price Shocks on the Fiscal Revenue and Economy of New Mexico
Researchers includeAssistant Professor Xiaoyang Wang; Graduate Student Assistant Rashmi Dhakal, Ph.D. candidate; and Undergraduate Student Assistant Daniel Dolman.

The researchers in this project examined how crude oil and natural gas price fluctuations affect New Mexico's state revenues, which rely heavily on the oil and gas sector. Using time-series data from 2006 to 2024 and multivariate econometric methods, including a lagged VAR framework, the study measures short- to medium-term impacts on direct and indirect taxes.

Key findings show that a 1% increase in monthly crude oil prices leads to a cumulative 0.63%-0.52% rise in royalties and severance taxes within 12 months, while a 1% increase in natural gas prices results in a 0.70%-0.43% increase. However, these effects lose statistical significance after six months. For indirect taxes, gross receipts tax revenue is positively influenced by crude oil prices, becoming statistically significant after six months, but natural gas prices show no effect. Personal income tax tied to oil and gas payments shows no significant relationship with commodity price shifts.

Unlike long-term projections, this time-series approach highlights short- to medium-term effects, revealing that direct tax revenues are most responsive in the first six months, while crude oil's impact on gross receipts tax emerges later. These results provide useful insights for improving revenue forecasting in New Mexico's oil-dependent economy.

Forests to Airsheds: Investigating Wildfire Smoke Exposure as a Financing Mechanism for Wildfire Risk Mitigation
Researchers includeAssociate Professor Benjamin Jones; and Graduate Student Assistant Ahmed Amine Jawhari, Ph.D. candidate.

According to this research study led by Associate Professor Benjamin Jones, wildfire activity in the western U.S. has grown more intense, with smoke plumes creating widespread health, visibility, and recreation costs. Prescribed fire combined with mechanical thinning is the most effective tool for reducing long-term smoke, but implementation is slowed by funding challenges and public concerns over short-term smoke exposure and fire escape risks. New Mexico illustrates these stakes: in 2022, wildfires released 152,000 tons of PM2.5, contributing to 171 asthma-related ER visits, and the state's largest wildfire began as a prescribed burn that escaped control.

To assess public support for smoke reduction strategies, a 2021 survey of 1,023 households across 11 western states (41 in NM) tested willingness-to-pay (WTP) for a hypothetical federal program that would cut one wildfire smoke day annually for 20 years. Median WTP was $94 per household per year in the western U.S. ($2.7 billion annually) and $47 in New Mexico ($40 million annually). Results show strong support: 68% of NM households favored increased prescribed fire and thinning to reduce smoke, while only 15% rejected prescribed fire entirely. This provides the first valuation evidence that households support prescribed burns as a trade-off to lessen future wildfire smoke exposure.

Drinking Water Equity in New Mexico: Access, Quality and Affordability
Researchers includeAssociate Professor Jingjing Wang; Graduate Student Assistant Nahid Samimimotlagh, Ph.D. candidate; and Undergraduate Student Assistants Alex Kaltenbach and Christina Klas.

This research was designed to demonstrate how water scarcity is a critical issue in arid regions like the U.S. Southwest, where population growth, climate change, and pollution intensify shortages. Disadvantaged communities face the greatest challenges, with limited access to reliable, clean, and affordable drinking water. This study evaluates drinking water equity in New Mexico by examining access, quality, and affordability, introducing a new set of equity metrics applied statewide and within Albuquerque.

Led by Associate Professor Jingjing Wang, the research findings show that community water systems relying on surface water sources face higher violation rates, including health-related risks. Systems serving low-income, rural, and non-white populations also experience more violations compared to higher-income, urban, predominantly white communities. On tribal lands, however, areas with greater proportions of tribal territory are linked to fewer violations, suggesting differences in governance or infrastructure.

Within Albuquerque, only about 2% of census block groups show signs of water-related vulnerability, and no area experiences multiple overlapping risks. Vulnerabilities include underuse (2 block groups), affordability (1), and climate exposure (5). Overall, Albuquerque's water services are considered broadly affordable, based on a benchmark of 50 gallons per capita per day and household bills below 4.5% of median income. These insights can guide future water policy and equity efforts in New Mexico.

Food Purchasing & Nutrition: The Role of Dollar Stores
Researchers includeAssistant Professors Xiaoxue Li and Sarah Stith; Graduate Student Assistant Nahid Swarup Paudel, Ph.D. candidate; and Undergraduate Student Assistant Liam Hashagen.

Dollar stores play a growing role in food access, particularly in rural areas where they may be the only alternative to gas stations. While they provide fewer options than grocery stores-especially for fresh produce-they often expand access for households with limited resources or transportation. This research, led by Assistant Professors Xiaoxue Li and Sarah Stith, evaluates how dollar stores influence food quality, using national data on store presence merged with household food purchase patterns, with a focus on rural and low-income households and a New Mexico subsample.

Nationally, rural households in areas with dollar stores purchase fewer fruits and vegetables, particularly fresh and canned, and low-income households also buy fewer frozen fruits and vegetables. However, these households spend less overall on groceries, suggesting affordability trade-offs. No effect was found on dietary diversity.

In New Mexico, effects are more nuanced. Dollar stores are linked to a higher likelihood of households purchasing any fruits or vegetables overall, though in urban areas they correlate with lower food spending and reduced dietary diversity. In rural New Mexico, by contrast, dollar stores are associated with increased dietary diversity, likely because they replace gas stations rather than grocery stores. While more methodologically robust, small sample sizes limit generalizability.

To view the final reports for each project, visit NM Research 2025.