Assistant Professor, Economics

864.294.2621
Riley Hall 109F
melanie.cozad@furman.edu

  • Current disciplinary research interests

      My current areas of scholarly activity fall broadly within the areas of environmental and public economics. Much of my research focuses on how changes in environmental and health policies potentially affect the behavior of individuals and firms.

      One specific area of activity relating to sustainability examines the effectiveness of taxes in promoting the purchase of “greener” durable goods. In order to determine how and when a gasoline tax might induce consumers to switch to more fuel efficient vehicles, a co-author and I are using data from the 1979 oil price surge to analyze the impacts of changes in fuel prices on the timing of individuals’ driving behavior. We find the oil price increase induces significant decreases in carbon emissions on both the intensive (miles driven) and the extensive (auto fuel efficiency) margins. The changes on the intensive margin occur simultaneously with the rise in oil prices; however, impacts on the extensive margin occur with a six-month delay. The findings suggest that a permanent tax is more effective than a temporary tax in inducing consumers to switch to more fuel-efficient vehicles.

      A second related project examines the implications of a fuel tax on traffic fatalities. As rising fuel prices affect the number of miles driven and auto fuel efficiency, it also impacts traffic fatalities. If rising fuel prices induce consumers to immediately drive less, then there should also be an immediate reduction in traffic fatalities. However, as consumers switch to more fuel-efficient vehicles and the number of miles driven increases then fatalities may rise. A fuel tax also changes the composition of the vehicle fleet impacting fatalities. As more consumers switch to smaller, lightweight, more fuel-efficient vehicles, it reduces the number of light trucks and SUVs on the roadways. While light truck and SUVs provide greater safety for the driver of the vehicle, they also impose a greater external risk to the drivers in other vehicles. Preliminary results suggest a permanent fuel tax also helps consumers account for greater external risk in their vehicle purchase decisions.

      Another prominent example of a policy that potentially elicits behavioral responses is federal health care reform. This reform represents the most significant health insurance expansion since Medicare and Medicaid were created in 1965. One project I am working on concentrates on how the reform potentially affects the supply side of health care markets. While health insurance expansion potentially increases the demand for care, it also creates uncertainty, thereby impacting hospital capacity, employment, and delivery of care. The results suggest that the reform significantly reduced demand for emergency care but did not impact the total demand for care. While the reform did not have a significant impact on hospital employment, it did increase capacity and improve delivery of care by reducing a patient’s length of stay within the hospital. In general, benefits from the decline in emergency care use and length of stay seem to outweigh a cost increase from capacity.

  • Interest in connecting sustainability to research

      Sustainability recognizes and analyzes complex relationships among human, social, and environmental systems, and is concerned with how changes in one system might affect other systems (from the The David E. Shi Center for Sustainability 2011-2012 report). Economics provides a powerful set of tools in which to analyze sustainability, because it focuses on how and why people respond to incentives as well as inherent trade-offs they face. In teaching, I am interested in getting students to realize that economics and sustainability are not mutually exclusive. Consideration of sustainability from an economic lens often provides insights into the unintended and intended consequences of policy.

      One example of research that I discuss in my Introduction to Economics class that demonstrates the unintended consequences of policy is a driving policy instituted in Mexico City. The policy’s goal was to reduce carbon emissions by restricting the days on which certain vehicles could be driven. The policy stipulated that vehicles with even numbered license plates could only drive on Monday and Wednesdays while those with odd number plates could drive on Tuesdays and Thursdays. A vehicle with either number has the ability to drive on weekends (Friday- Sunday). Upon evaluating the effect of the policy on vehicle emissions, Lucas Davis found an unintended consequence was that carbon emissions actually increased as a result of the policy. The increase was attributed to individuals keeping their older fuel-inefficient vehicles after the purchase of a new one, so that they could retain a both an even and odd number plate, which meant they gained more flexibility in when they could drive.

      Since economic analysis often yields these types of interesting conclusions, I would like to focus on the importance of considering potential unintended consequences that arise in sustainability policy design because individuals are responding to incentives in a way that policy-makers failed to anticipate. Conservation is another particular area that benefits from the understanding of incentives. Within my class, we have also discussed how an effective conservation strategy to protect rhinos in southern Africa needs to align the incentives of the people who live near the rhino with the rhino’s protection in order to be successful. We also examined how circumstances unique to the supply and demand for rhino horns adds an extra layer of complexity for those conservation groups who are working toward preserving the species.

      With respect to research, I wish to use my areas of expertise to get students involved in using the tools of economics to evaluate sustainability policies. The research I discussed in Question 4 involves identifying and using data in the analysis of a particular questions.

      For students learning how to identify and manage a dataset is often a difficult first step within the research process. My goal in mentoring students is always to demonstrate that while data management and analysis is arduous, it often provides important insights into the effectiveness of current policies as well as helping to shape future policy.

      In terms of service and collaboration, I am really interested in the Sustainability Speaker Series hosted by the Shi Center. I am eager to attend the free public lectures and learn from researchers who are focused on sustainability issues in other disciplines. In addition, I hope to be able to use my background to help organize or make suggestions regarding relevant speakers from economics that would enhance the student and faculty sustainability experience. One growing area of environmental economics that relates to the sustainability is the design and use of field experiments to access how individuals’ behavior can be influenced with respect to the conservation of water and energy. In these experiments, economists’ work with a utility company in a particular region to design and assess how effective a conservation campaign is on individual energy or water use.

  • Sustainability courses taught

      Within all the courses I teach, I incorporate many examples that pertain to sustainability. In particular, I use my Introduction to Economics course as a way for students to see how economics and sustainability concepts are not mutually exclusive. In the future, I will also be teaching Economics of the Environment.

      • Public Finance
      • Health Economics
      • Macroeconomics

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