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Dimitar Marmarov’07 (Plovdiv, Bulgaria) is learning economic modeling on a level normally not attempted until graduate school or post-graduate work.
He is assisting Chris Ruebeck, assistant professor of economics and business, who is researching the efficiency of the oyster fishing industry in New Jersey in the late 1800s. The experience is giving Marmarov insight into application of advanced models and theories used by practicing economists.
Ruebeck is examining the industry to analyze the effects of regulation on oystering, the results of which may enhance analysis of current-day situations involving controlled access to limited resources.
A mathematics-economics major, Marmarov started his research with Howard Bodenhorn, professor of economics and business and a historical economist, who began the project that he is now pursuing with Ruebeck and Marmarov when he discovered comprehensive data on the 1,000-vessel oyster fleet.
Marmarov is conducting the research as part of Lafayette’s distinctive EXCEL Scholars program, in which students assist faculty with research while earning a stipend. The program has helped make Lafayette a national leader in undergraduate research. Many of the more than 160 students who participate in EXCEL each year go on to publish papers in scholarly journals and/or present their research at conferences.
“Dimi is doing something that undergraduates don’t usually study, and honestly it’s not something that many study in graduate school. It’s a technique that practicing economists or a Ph.D. economist might use,” says Ruebeck.
Rather than use an averaging technique – the kind taught to undergraduates in econometrics class – to estimate the mean values for the inputs and outputs of production, Ruebeck has Marmarov searching for the most efficient production and cost values, the “frontiers,” a more accurate measure of the many variables of production and cost.
In mapping the variables of labor, capital, and land for the oyster industry, Marmarov used the STATA modeling software program.
“I had never worked in STATA; that was a great learning experience,” he says. “Inputting the data is the easy part [of the program], but it was a difficult program to learn. Professor Ruebeck taught me how to program. That was an amazing experience, having a trained economist teach me programming.”
“After that we started analyzing the data, which developed my analytical skills because we were discussing what it meant,” he adds.
What the data mean will lead Ruebeck to the ultimate purpose of his research, which is to analyze the effect of regulations on the availability of a limited resource — in this case, oysters.
“Restricting the use of limited resources is one policy designed to prevent the ‘tragedy of the commons,’” explains Ruebeck.
In instances where limited resources are, according to Ruebeck, “nobody’s and everybody’s property,” people will overuse a resource until it is depleted. (The name “tragedy of the commons” takes its name from common grazing land.)
To preserve resources, one option is to have the land owned privately (the theory being that ownership will lead to wise use of property and its resources so as not to diminish its value), while another is to have the government own the land and restrict its use through permits and regulations that limit access.
In this regard, the New Jersey oyster industry is particularly interesting to Ruebeck and Bodenhorn.
“At the time, natural oyster beds could not be owned, but oysters could be transported and artificial beds created on private property further up the bay,” explains Ruebeck. “Ownership of land under water was being determined at this time and in this place, setting precedents for the ability of states to allow ownership of land under water.”
“The laws governing natural beds specified the means of production to preserve the resource, so we may be able to look at the efficiencies of private versus public lands and look at the organization of production to learn something more about policies meant to avoid the tragedy of the commons based on this historical record,” he adds.
He notes that fishing methods from more than 100 years ago are not as different as one might think. The comparison of a few groups in large boats catching more (on private lands) while more people in smaller boats are catching less (on public lands) still holds today.
What is different today versus a century ago is thoroughness and accuracy of data collection, and that has given Ruebeck, Bodenhorn, and Marmarov hurdles to clear.
“Most of the [historical] data were put in the tables by hand and the calculations were done by hand,” Marmarov reports. “After we ran preliminary calculations we found a lot of spots where our results didn’t match theirs, so we are trying to find solutions to the discrepancies.”
“Also, there isn’t definitive data on what was caught on public lands and what was caught on private,” he adds.
These challenges are giving Marmarov another critical research lesson in economics – that of making assumptions.
“The challenge of any research is knowing what assumptions are OK to make,” says Ruebeck. “He’ll learn what is an appropriate assumption, what assumptions we can’t make, and how we qualify those assumptions when we write. We’ll have to state what led us to assume, in this case whether it was public or private lands, and he’ll also look at how sensitive our results are to those assumptions. What if we change our assumption? Do we get similar results?”
As an EXCEL Scholar, Marmarov finds the one-on-one relationship with a professor to have many benefits.
“With Professor Bodenhorn, the research was very much a discussion between us,” he says. “I started by looking at the data he had found, and then he gave me more than a dozen books to read about oystering. He asked me to give him a list of important sources that would help our research, and we would discuss what I was finding. So we were learning from each other. I had never done that with a professor and I found that amazing.”
“Professor Ruebeck gives me direction, but I have the freedom to decide how to proceed. This is more personal and goal oriented than work for class,” he adds.
As a national leader in undergraduate research, Lafayette sends one of the largest contingents to the National Conference on Undergraduate Research each year. Forty students have been accepted to present their research at this year’s conference.