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My Nevada Five: The Quirks of Our Economy

Nevada is a land of strange extremes. Here's how those factors make for a strange economy, according to professor Mary Riddel.

Nevada has vast swaths of federally managed lands including Lake Mead National Recreation Area. (Aaron Mayes/UNLV Photo Services)

Editor's Note:

In our My Nevada 5 series, UNLV faculty, students, and alumni share with you the bits of state history and culture that intrigue them. This piece is by Mary Riddel, chair and professor of economics in the UNLV Lee Business School. Her research focuses on environmental, behavioral, and urban and regional economics. She has studied a broad range of topics including natural resource law, biodiversity, and open space programs. Here’s her take on what makes the Silver State’s economy different.

 

1. Public Lands

Nevada has a higher proportion of public land -- more than 85 percent -- than any other state except Alaska. Although a small share of this land is held by state and local governments, the lion's share, about 58 million of the state's 70 million acres, is owned and managed by the federal government. These federal public lands include national parks, wildlife refuges, wilderness areas, military uses such as Nellis Air Force Base in the south and Naval Air Station at Fallon in the north, as well as the Nevada National Security Site (formerly the Nevada Test Site), operated by the U.S. Department of Energy. The site has long been part of Nevada mythology, with rumors maintaining that the bodies of aliens from Roswell, N.M., are housed there. It has been used for a variety of functions, including nuclear testing from 1951 until 1992.

2. Both Urban and Rural

Nevada is simultaneously one of the most urban and rural states in the U.S. More than 94 percent of Nevada residents live in an urban area, but 99 percent of the total acreage of the state is within a rural area. No other state has this extreme contrast. Of course, this is largely a function of the high proportion of land that is held by federal, state, and local governments.

This disparity has historically created interesting challenges for the people of the state, especially since the two urban areas, Clark and Washoe counties, are separated by 438 miles of desert. To add to this challenge, 75 percent of economic activity is generated in Clark, the southernmost county in the state, but the seat of state government is in Carson City in the north.

3. Most Concentrated in One Industry: Gaming and Tourism

The economy of Nevada is highly concentrated in the tourism, gaming, and hospitality sectors. Nevada has 2.5 times the national average of its workforce employed in this sector, and Clark County has nearly three times the national average. This concentration offers both opportunities and challenges for the economy.

Internationally, tourism and gaming are growing more quickly than other industries, giving Nevada the opportunity to "ride the fast horse" to economic growth. However, tourism is largely dependent on discretionary income, which is particularly vulnerable during global economic contraction. In recent years, there has been a push to diversify the Nevada economy. To that end, Gov. Brian Sandoval formed the Nevada Governor's Office of Economic Development to stimulate business expansion and retention, attract new business, and facilitate community development.

4. Private Capital-Driven Urban Development

Throughout the country, municipalities have struggled with the crime and poverty associated with urban decay. Those issues have been uniquely addressed in Las Vegas, where Tony Hsieh, founder and CEO of Zappos.com, launched the Downtown Project. The goal of the project is to revitalize downtown Las Vegas, with the initial funding coming from private capital rather than new taxes. And a lot of private capital is involved: the Downtown Project is investing $200 million in real estate and development, $50 million in small businesses, $50 million in education, and $50 million in new technology firms through the highly visible VegasTech Fund.

The effects of these projects have already been transformational for downtown. We now have an Arts District, a host of cafes, and of course, Zappos.com's headquarters in the old Las Vegas City Hall. Events such as First Friday bring artists and other creative people together with the community, helping to build a new vision of Las Vegas' urban core.

5. Most Opportunity for Renewable Resources

Nevada has the largest stock of renewable energy resources of any state. Living in Las Vegas, it's obvious that Southern Nevada is one of the top generators of solar power and has vast untapped potential. But Nevada's wind and geothermal resources are also vast. Full utilization of Nevada's wind resources could generate 50.6 million megawatt hours of electricity. A swath of geothermal sites covers portions of the western U.S. In Nevada, more than 60 percent of the state has sites with temperatures high enough to generate electricity. Nevada has the most potential of any state to move to 100 percent renewable electricity generation within the next 50 years.

Topics:

economy,  Nevada

Campus Units:

Lee Business School,  Center for Business and Economic Research

Related News:

My Nevada 5: The Maps That Shaped Us, My Nevada 5: Exceptional Women in Gaming, UNLV Economists Optimistic Southern Nevada's Economy Will Grow, But At Slow Pace In 2014

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