Profile: Richard Hornbeck
Some people decorate their offices with awards; others hang their children’s artwork. Richard Hornbeck, an assistant professor of economics at Harvard University, displays pieces of barbed wire—a reminder of an unlikely start to his career.
Tasked with writing an economic history paper while a first-year graduate student in economics at MIT in 2004, Hornbeck turned to the Internet and googled “economic history data.” U.S. Agricultural Census data from 1880, he noticed, included the “strangely specific” cost of building fences.
The reason soon became clear: during the 1870s, the capital invested in wooden fences, he learned, was greater than that invested in railroads, because farmers required fences to establish de facto property rights over land. Then came a welcome invention: the introduction of barbed wire, which in the 1880s, Hornbeck explains, “dramatically lowered the cost of fencing."
Hornbeck applied economic methods to tease out the positive effect of barbed wire—and the property rights it secured—on agricultural development in the Great Plains. The resulting paper appeared in the Quarterly Journal of Economics last year.
His recent research continues to investigate how technological innovations affect our relationship with the environment. One project, funded in part by a grant from the Harvard University Center for the Environment, looks at the effects of unsustainable water use on the Great Plains after World War II, when advanced irrigation technology was introduced.
Underlying the Great Plains is the Ogallala Aquifer, which today supplies about 30 percent of the groundwater used for irrigation nationally. From the aquifer’s discovery in the 1890s until the 1940s, farmers had been able to access only enough water to irrigate a few acres. But the invention of center pivot sprinklers and powerful pumps allowed them to irrigate much larger tracts of land, and gradually to shift to water-intensive crops, Hornbeck found. Farmers soon began pumping groundwater faster than the aquifer could replenish it. By 2002, as the water table lowered, land values in the region dropped to less than half their 1974 peak.
The project highlights another thread running through Hornbeck’s research: using historical data to examine how people adjust to major environmental changes. “Some aspects of environmental questions,” Hornbeck says, “can only be answered with historical data. Economic theory anticipates that people will adjust to the environment, but how quickly do they adjust, and how much do these adjustments mitigate the environmental impacts?"
This question motivated his research on the American Dust Bowl, when Great Plains farmers were faced with a daunting choice: either shift from crop production to other agricultural activities, such as cattle ranching, or move out of the region. In the short and long run, Hornbeck found, many chose to leave. From this episode, he concludes that economic adjustments to environmental degradation may require people to migrate—rather than adapt through different land use practices. The findings could inform our understanding of how people will respond to the threats posed by climate change during this century.
For Hornbeck, economic history provides a way to marry his passion for public policy with an interest in scientific pursuits, using the past as his laboratory. “Economic historians traditionally used economics to understand history. I try to use history to understand economics.
By: Sarah Beam Aldy
Note: This article originally appeared in Environment@Harvard Volume 3, Issue 2.