Border Business Briefs Summer 2014

SUMMER 2014 | V. 10, NO. 3

BORDER business

BRIEFS A Publication of the Center for Border Economic Studies

1 CBEST

CENTER FOR

BORDER

ECONOMICS STUDIES

COLLEGE FOR BUSINESS ADMINISTRATION The Center for Border Economic Studies (CBEST) is a public policy research unit of the College of Business Administration at The University of Texas-Pan American. CBEST is dedicated to the study of problems and issues unique to the U.S. and Mexico border economy. CBEST conducts interdisciplinary research that supports economic development, trade, entrepreneurship, innovation, social mobility, and access. Among its technical reports, the Center publishes the Border Business Briefs (BBB), a quarterly publication, and the Business Outlook Forecast. an annual publication. CBEST has strategic pa rtnerships with private sectors, foundations, government agencies, research scholars, and nonprofits to fulfill its mission.

CBEST’s focuses on research in the area of interdisciplinary policy, in support of sustainable economic development. We publish articles, monographs, books and reports that examine economic, social and political issues in the border region and make them available to policymakers, business leaders, government officials, academics, students and the border community, in order to foster informed decision making.

In addition, CBEST provides contract services in policy research, survey design, data collection, data research analysis, data interpretation, presentations and reports. These services are performed for a fee. Please contact CBEST for additional information on the contract services we provide.

DIRECTOR/Editor-in-Chief

ADVISORY BOARD

EDITORIAL BOARD

Cynthia M. Sakulenzki RGV Hispanic Chamber of Commerce

Salvador Contreras, Ph.D.

Pablo Camacho, Ph.D. Texas A&M International University Salvador Contreras Ph.D. The University of Texas-Pan American Alberto Davila, Ph.D. The University of Texas-Pan American Tom Fullerton, Ph.D. The University of Texas at El Paso Gautam Hazarika, Ph.D. The University of Texas at Brownsville

Alex Meade Mission EDC

Eduardo Caso Lone Star National Bank Ismael Delgado San Juan EDC Joey Treviño Weslaco EDC Maria Mann SCIC-Women’s Business Center Raudel Garza Harlingen EDC Rebecca M. Olaguibel City of McAllen

1201 W. Univerisity Drive, Edinburg, TX 78539 | cbest@utpa.edu | utpa.edu/cbest

BORDER BUSINESS BRIEFS

2 The work of the Center for Border Economic Studies is financed through contracts, grants, gifts and sponsorships. Your sponsorship plays an important role in the work we do.

We accept gifts and sponsorships of any size. Currently, we have five explicit sponsorship levels:

PLATINUM SPONSOR $1,000 | Full-page recognition in the next two issues.

GOLD SPONSOR $750 | Full-page recognition in the next issue.

SILVER SPONSOR $500 | Half-page recognition in the next issue.

BRONZE SPONSOR $250 | Quarter-page recognition in the next issue.

COPPER SPONSOR $100 | Mention of your support in the next issue.

Your generosity to CBEST will be acknowledged in the following ways: 1) You will receive a letter from UTPA acknowledging your gift.

2) Your name/logo and valued support will be displayed in a future issue of Border Business Briefs.

BECOME a sponsor

TODAY utpa.edu/cbest

*A full page is 8.5 x 11 in. actual size and coverage area will vary. Sponsorship level and recognition are subject to change.

Please contact CBEST for full details.

SUMMER 2014

BORDER

LETTER FROM THE EDITOR

business

Dear Reader,

BRIEFS

Thank you for your continual support. As a publication of the Center for Border Economics Studies at The University of Texas-Pan American (UTPA) we strive to bring to you diverse stories that are of importance to our region.

A Publication of the Center for Border Economic Studies

THIS ISSUE 6 SOUTH TEXAS ECONOMIC GAUGE 8 MANUFACTURING

The High-Tech Industry in the U.S.

10 AROUND THE CORNER Apple A Brand in Point

12 FINANCIAL LITERACY

Meeting the Financial Literacy Challenge

14 VALLEY TALENT

UTPA Excellence in Service Award Winner

16 PERSONAL AND SMALL BUSINESS FINANCE

Mint.com a Big App for Your Personal Finance and Small Business

This issue features the financial literary challenge, high-tech industry, and the impact of Winter Texans on the Rio Grande Valley. Further, this issue presents work by UTPA researchers on neuromarketing and a review on an open-source small business financial application called mint.com. In addition, we showcase our “Valley talent” Dr. Marie T. Mora, winner of the 2014 UTPA Excellence in Service Award.

The articles published in the Border Business Briefs come from researchers and experts from a wide range of disciplines. Without their contribution this publication would not be possible. In addition, we are in great debt to Studio Twelve01 for their support in designing this publication.

This publication and other works by CBEST are made possible from the generosity of volunteers and sponsors like you. If you are not already a sponsor, please visit us online at utpa.edu/cbest to learn how you can become involved.

We hope you enjoy this issue. Feel free to send us your comments at cbest@utpa.edu.

Best regards,

Salvador Contreras, Ph.D. Editor-in-Chief

18 TOURISM

Winter Texans and The Valley Economy 1201 W. Univerisity Drive, Edinburg, TX 78539 | cbest@utpa.edu | www.utpa.edu/cbest

CORRECTION 5

2.5%

CORRECTION

2.0%

2.0%

1.9%

1.9%

1.9%

1.8% 1.6%

The Spring 2014 issue article titled “A Not So Hot South Texas Labor Market” reported incorrect data for the El Paso MSA. This error affected Figure 1, 3, and 4. Below are the corrected figures.

1.5%

1.3%

1.5%

1.2%

1.1% 1.0%

1.5%

1.4%

1.3%

1.7% 1.6%

1.5%

0.8% 0.6%

0.5%

In particular, growth in retail was slightly greater than initially reported at 2%. While, employment in good production was actually negative at -.4%.

In the Spring 2014 issue, Figure 3 and 4 did not show the El Paso MSA line. The updated Figure 3 shows the El Paso MSA share of employees in the retail sector increasing steadily since 2010 and up from where it was in January 2007. The updated Figure 4 shows El Paso MSA share of employees in the goods production sector falling steadily since 2008.

0.0% 0.0% MCALLEN

BROWNSVILLE

CORPUS CHRISTI

LAREDO

SAN ANTONIO

EL PASO

-0.5%

TEXAS -0.4%

-1.0%

-1.5%

AVERAGE EMPLOYMENT GROWTH AVERAGE RETAIL GROWTH

-1.7%

AVERAGE GOODS GROWTH

-2.0%

Figure 1: Employment Growth by MSA

GOODS PRODUCING EMPLOYEES AS PERCENT OF TOTAL .25

.18

.2

GOOD PRODUCING

RETAIL

RETAIL EMPLOYEES AS PERCENT OF TOTAL .2

.16

.1

.14

.05

.12 01 Jan 2007

.15

01 Jan 2008

01 Jan 2009

01 Jan 2010

01 Jan 2011

01 Jan 2012

01 Jan 2013

01 Jan 2014

01 Jan 2007

01 Jan 2008

01 Jan 2009

01 Jan 2010

DATE 2

01 Jan 2011

01 Jan 2012

San Antonio MSA

Brownsville MSA

San Antonio MSA

Brownsville MSA

Corpus Christi MSA

El Paso MSA

Corpus Christi MSA

El Paso MSA

Laredo MSA

McAllen MSA

Laredo MSA

McAllen MSA

Texas

Figure 3: Retail Employment Share by MSA

01 Jan 2013

01 Jan 2014

DATE 2

Texas

Figure 4: Goods Employment Share by MSA

Data was retrieved from the Federal Reserve Bank of Saint Louis Bank website. All three figures are labeled to match the Spring 2014 issue. Figure 1 shows average growth rates over a 12-month period on January 2014 for selected employment sectors for each MSA. Figure 3 is the ratio of retail over total employees for each MSA for the January 2007 to January 2014 period. Figure 4 is the ratio of goods production over total employees for each MSA for the January 2007 to January 2014 period.

SUMMER 2014

6 SOUTH TEXAS ECONOMIC GAUGE

SOUTH TEXAS

economic

GAUGE

BORDER BUSINESS BRIEFS

2

0

1

6

May Unemployment rate

8.7 4

hange y/y) (% c 3 1 20 1

0 -1

1

5

-5.7

.3

3

-1

hange y/y) (% c

1.8

er

4

Gross Sale sQ

13 20

-1

4

-2

Gross Sale sQ

-2

-1

1

es N

0

9.3

onf

0

c

3

May Unemployment rate

2.2

MCAL LEN -ED Empl oye

6

(MSA) INGEN L R HA 2014 (% chang LE- arm, May e ov

r year) r ove yea ge han 1.4

5

-1

201 4( %

r) yea

3

c

r year) r ove yea ge han 1

1.7

4

ove r r) yea

ar onf

0

-2

-2

-1

ION (MSA) -MISS G R U INB m, May 2014 (% change

201 4( %

loye es N

-2

House Pri ces Q 1

BROW NSV Emp IL

House Pri ces Q 1

Scources: Unemployment rate and nonfarm employment are monthly and come from the U.S. Department of Labor. Non farm Employment measures the percentage change from one year ago. Gross sales are quarterly and reported by the Texas Comptroller of Public Accounts. The gross sales percentage change measure Q4 2013 from Q4 2012. House prices index is quarterly data that comes from the Federal Housing Finance Agency.

The reported house price is the percentage change in the index from a year ago.

2

7

5.5

-1

-1

Gross Sale sQ

-16.8

2

2.4

4

ove r

5 6

0

4.9

-2

May Unemployment rate

-1

1

2

c

4

hange y/y) (% c 3 1 20 1

2

3

-5

-2 -1

2

Gross Sale sQ

-2

0 -1

EL

PA Empl S oye es N

1.5

1.1

0

arm onf

0

6.9

4

13 20

hange y/y) (% c

) MSA ( I T 2014 (% chang , May e RIS

r year) r ove yea ge han 2

7.0

3

May Unemployment rate

-1

r) yea

6

3

c

201 4( %

1

1

ver

5

2

1

0

-2

r year) r ove yea ge 2 han

.1

r) yea

4

201 4( %

ees N

-1

A) MS 14 (% chan ( May 20 ge o O rm, a onf

4

House Pri ces Q 1

CORP US CH Empl oy

House Pri ces Q 1 -2

change y/y)

(% 13 20

-2 3

-1

3

-3.6

Gross Sale sQ

2

6

Gross Sale sQ

0 -2

-1

1

1

5

May Unemployment rate

hange y/y) (% c 3 1 20 0

4

3

1

B ploy ees N

SAN ANTONIO -NE W Em

1.3

3.8

4.4

4

6

4.9

o

r year) r ove yea ge han

5

January Unemployment rate

0

O 2014 (% chang e ov ED arm, May er nf

c

1

2

-1

A) (MS

201 4( %

r) yea

4

c

r year) r ove yea ge han 2

1

2.5

ove r

r) yea

ar onf

0

-2

0

-1

SA) LS (M E F UN 2014 (% chan ge RA m, June

201 4( %

-1

-2

House Pri ces Q 1

LAR Empl oye es N

House Pri ces Q 4

SUMMER 2014

8 MANUFACTURING

By Orlando Monsivais and Eduardo Saucedo

FIG 1: HIGH TECH INDUSTRY IN THE US, ANNUAL SALARIES IN 2013 160,000

DOLLARS

130,000

Average all industry in the country Annual Salary=47,944

100,000

70,000

40,000 517

518 3254 3333 3341 3342 3343 3344 3345 3346 3364 3391 5112 5191 5413 5415 5417 6115

NAICS SECTORS FIG 2: HIGH TECH INDUSTRY IN THE US (EMPLOYMENT & ESTABLISHMENTS) EMPLOYMENT

ESTABLISHMENTS 8,941,625

9,000,000

533,749 5,500,00

8,700,000 8,400,000

500,000

431,995

8,941,625

8,100,000

450,000 400,000

7,800,000

350,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2012 2011 2011 2012 TOTAL EMPLOYMENT TOTAL ESTABLISHMENTS Source: Bureau of Labor Statistics

FIG 3: HIGH TECH INDUSTRY TEXAS (EMPLOYMENT & ESTABLISHMENTS) EMPLOYMENT 680,000

ESTABLISHMENTS

685,752

37,066

640,000

30,000

646,355 600,000

40,000

27,115

20,000 10,000

560,000

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2012 2011 2011 2012 TOTAL EMPLOYMENT TOTAL ESTABLISHMENTS Source: Bureau of Labor Statistics

THE HIGH-TECH

industry IN THE U.S. BORDER BUSINESS BRIEFS

The high-tech industry is one that creates value added in its production process. Academic papers focused on regional development grant special attention to this indU.S.try because it is considered a potential engine to local economic development. The byproduct of this sector is higher wages it produces relative to other industries, the demand of greater skills from its employees, and their typical rapid growth.

9 In this article, first we define the term “hightech,” second we analyze the annual wages in such industries, and lastly we analyze the performance of employment and number of establishments in this industry for the country, Texas, and the Rio Grande Valley (RGV) for the period 2000-2012.

during the 1990s and reached its peak in 2000.

Following the years after the dot.com euphoria, the industry collapsed. Since then, it has exhibited ambiguous growth, specifically, the number of establishments has increased while employment has decreased.

In the literature there does not exist a specific definition for high-tech. Society’s perception of what “high-tech” is has shifted and is continually doing so. For instance, a land line telephone in the early 1900s; this advent was undoubtedly considered high-tech back then, yet today it is close to becoming an obsolete technology. This example illustrates that there does not exist a static definition that will be consistent throughout time.

This is simply due to the fact that what is considered innovative now, likely will not be in the future.

In fact, even the National Science Foundation has no single preferred method for identifying a high-tech industry (See the Cincinnati, Regional Chamber Bulletin, 2009).

Figures 2 and 3 exhibit the employment level and number of establishments in the high-tech industry in the United States and the State of Texas.

To cover the lack of a precise characterization of the high-tech industry, the Organization for Economic Cooperation and Development (OECD) has developed its own definition. It gathers different sectors, then sets as criteria the percentage of sectorial research and development expenditures over total sales. If this exceeds 3%, it is considered a high-tech sector.

In this article, we study the 19 sectors mentioned in the “High-tech Study” developed by the Milken Institute in 2009. Since it is highly cited by researchers who specialize in the High-tech Industry, we feel the chosen sectors are particularly relevant.

WAGES IN THE HIGH-TECH INDUSTRY Figure 1 shows the annual wages in dollars in the high-tech industry for 2013. This graph confirms the conventional wisdom that wages in this industry are, on average, higher than in other industries For example, it can be seen that the average annual wage for all industries in the country was $48,000, while the high-tech industry produced wages between 30% and 227% higher, depending on the high-tech sector. The highest annual wages in this industry were in the 3341 and 5112 NAICS sectors, which correspond to Computer Equipment Manufacturing and Software Publishers, respectively. These two sectors earned an average annual wage of over $150,000. The lowest paid sector, 6215, earned $62,000 which is still a considerable amount above the all-industries average.

EMPLOYMENT AND ESTABLISHMENTS IN THE HIGH-TECH INDUSTRY The high-tech industry experienced critical growth

...DID NOT UNDERGO THE SAME DRAMATIC SHIFTS IN EMPLOYMENT..

During the period 2000-2012, the employment level for the industry in the U.S. decreased 8%. It went from 8.94 million in 2000 to 8..22 million in 2012.

During the same period the number of establishments steadily climbed up from 431,995 in 2000 to 533,749 in 2012, an increase of 23%. Regarding the high-tech industry in Texas, it can be said that the employment level and establishment count underwent a similar pattern as the nation. Texas went from an employment level of 685,752 in 2000, to 646,355 in 2012, a decrease of 5.7%. However, the establishment count for the industry in Texas increased by 36.7% from a total of 27,115 in 2000 to 37,066 in 2012.

As confirmed by these two figures, the high tech industry in the United States and Texas experienced very similar patterns. In both cases the number of establishments increased while total employment decreased. Furthermore, the dip in employment later in the decade can be attributed to the economic recession of 2009; it clearly affected the U.S. and Texas industries in an analogous fashion.

The story is different when we analyze the Rio Grande Valley (RGV). The RGV is the McAllen-Edinburg-Mission MSA and Brownsville-Harlingen MSA. Figure 4 shows the performance of the high-tech industry during the period 2000-2012.

It is immediately made clear from Figure 4 that the RGV did not exhibit the same variability as the U.S. and Texas in terms of total employment. In fact, while the U.S. and Texas have both experienced noticeable declines in employment during the period 2000-2012, the RGV has been steadily increasing its employment level in the high-tech industry, despite its relatively low number of jobs. Specifically, the employment level grew from 2,567 in 2000 to 3,809 in 2012; this represents a growth of 48.4%. The number of establishments in the RGV climbed from 265 in 2000 to 434 in 2012, which represents an increase of 63.8%.

Unlike the U.S. and Texas, the establishment count and the employment level in the RGV both increased during this period. It is also important to note the small impact that the recession of 2009 had on the RGV in comparison to the effect it had on the U.S. and Texas. By comparing each of the employment levels for the U.S., Texas, and the RGV, it is clearly visible that the high-tech industry in the RGV did not undergo the same dramatic shifts in employment that rippled across Texas and U.S..

Orlando Monsivais is an undergraduate student in Finance at The University of Texas-Pan American.

Eduardo Saucedo is a Lecturer in the Department of Economics and Finance at The University of Texas-Pan American.

Endnotes: The 19 industries in the Milken study, identified within the North American Industry Classification System (NAICS) are: 3254-Pharmaceutical and medicine manufacturing, 5112-Software publishers, 3333-Commercial and service industry machinery manufac., 5121-Motion picture and video industries, 3341-Computer and peripheral equipment manufacturing, 517-Telecommunications, 3342-Communications equipment manufacturing, 518-Internet service providers, web search portals, and data processing services, 3343-Audio and video equipment manufacturing, 5191-Other information services, 3344-Semiconductor and other electronic component manuf., 5413-Architectural, engineering and related services, 3345-Navigational/measuring/medical/control instrum. manuf., 5415-Computer systems design and related services, 3346-Manuf. and reproducing magnetic and optical media, 5417-Scientific R&D services, 3364-Aerospace products and parts manufacturing, 6215-Medical and diagnostic laboratories, 3391-Medical equipment and supplies manufacturing.

FIG 4: HIGH TECH INDUSTRY IN THE RGV (EMPLOYMENT & ESTABLISHMENTS) EMPLOYMENT

ESTABLISHMENTS

5,000

434 500 400

4,000

265

3,809

3,000

300 200 100

2,000

2,567

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2012 2011 2011 2012 TOTAL EMPLOYMENT TOTAL ESTABLISHMENTS Source: Bureau of Labor Statistics

SUMMER 2014

10 AROUND THE CORNER

By Yi-Chia Wu

apple A BRAND IN POINT BORDER BUSINESS BRIEFS

How do people feel about Apple, Inc., a company known to have an almost cult-like following? Yi-Chia Wu, a Ph.D. student in marketing, decided to measure people’s responses when viewing various Apple images. She wants to see if the Apple user reacts to Apple devices on a rational level, or acts on a more subconscious basis.

It’s known that, in a fashion similar to religion, material objects can be embedded with meaning and interpreted by consumers as validating their existence.

11

Yi-Chia intends to determine whether a brand can develop a meaning similar to religion and whether brand devotion rises to the level of a spiritual state. Specifically, Yi-Chia is trying to determine if there is any similarity to the feeling generated by spiritual faith. Does the Apple logo elicit a response similar to seeing a picture of a cross for example? Is there a reason Apple stores are built with soaring architecture reminiscent of a cathedral?

She asked subjects to evaluate themselves through an online survey about their experience as an Apple user.

Then, Yi-Chia matches their written responses to brain activity when they see a photo that is associated with Apple Inc. Through the measurement of brain activity, Yi-Chia aims to capture subjects’ mental state to determine the impact of the Apple brand.

Yi-Chia measures neural activity through the use of EEG ( e l e c t r o e n c e p h a l o g ra m ) . E E G m e a s u r e s s m a l l e l e c t r i c a l signals generated by brain activity. She attaches electrodes to the scalps of her subjects and a computer records their electrical signals as they look at the pictures. Neuromarketing, as this area of study is known, has been gaining traction among marketers and other researchers interested in determining the neural activity that distinguishes brand awareness from brand loyalty. This work is being conducted by third- and fourth-year Ph.D. marketing students at UTPA. She is conducting the EEG study as part of her dissertation over the summer. Her adviser, marketing professor Dr. Michael Minor, notes that Yi-Chia’s work is one of several studies on brain activity at UTPA. In fact a neuroscience interest group has recently been established at the university, with support from COBA dean Dr. Teo Ozuna. Members of the group are from psychology, biology, and nursing to rehabilitation, engineering, education, ERAHC and other areas.

Yi-Chia hopes her research will be of use to academia and businesses, especially Valley retail businesses, many of which are heavily dependent on customers from Mexico. Her research has attracted attention from scholars in different disciplines on the UTPA campus.

Yi-Chia Wu is a fourth-year marketing Ph.D. student at The University of Texas-Pan American.

SUMMER 2014

12 FINANCIAL LITERACY

by Sara K. Ray and Terrance K. Martin

MEETING THE FINANCIAL

literacy challenge Managing money, understanding the complexities of the financial world, and navigating through difficult economic decisions is a challenge! On April 12, 2014, four teams of students from three Rio Grande Valley high schools met this challenge in a competition hosted by the College of Business Administration at The University of Texas-Pan American. These 16 students, along with their classmates, participated in the High School Financial Literacy Challenge during the Spring 2014 semester. The competition was made possible by the generous support of State Farm Insurance and Procter & Gamble. The Financial Literacy Challenge (FLC) is a set of programs organized and administered by the UTPA Department of Economics & Finance to equip the population of the Rio Grande Valley with the knowledge and skills needed to manage the challenges of personal finance.

The goal of the High School FLC is to help high school seniors develop healthy financial behaviors in a fun and engaging way and to equip them with the knowledge and skills they will need to meet the challenges of paying for college, planning for careers, and building their financial futures. In the six weeks leading up to the FLC competition day, UTPA undergraduate economics and finance majors volunteered to lead weekly mentoring sessions at Edcouch-Elsa High School, PSJA North High School, and San Isidro High School. During these sessions, the FLC mentors led students in activities and group discussions that focused on four major areas of personal finance: financial basics and setting goals, credit usage (with an emphasis on building an

BORDER BUSINESS BRIEFS

excellent credit history and educational loans), saving and investing, and insurance and risk management. These mentoring sessions not only helped the students prepare for the FLC competition, but it also gave the participating high school students an opportunity to engage with UTPA students who have recently faced similar struggles as these high school students in planning for college and careers. “Since they are a little closer to our age rather than teachers, they can really give us insight like ‘guys, be careful with student loans,’ which provides us a lot of insight for us to make better choices,” Meagan Ledesma, a sophomore at PSJA North, said of her UTPA FLC mentors. Jim Post, Meagan’s AP economics teacher and FLC sponsoring teacher at PSJA North, also praised the FLC’s mentoring model. “The mentors that came from UT Pan American did a great job of motivating the students and getting them to understand that personal finance is something they are going to have for the rest of their lives—it is something they will use forever,” Post said.

On the FLC competition day, the students selected to compete by their teachers and mentors gathered at the UTPA Community Engagement and Student Services Building. The competition proceeded in three rounds. The first two rounds were Jeopardy-style and consisted of questions that tested the students’ knowledge of information that was covered during mentoring sessions. After the second round, the two highest scoring teams went on to the final round. Research shows that financial knowledge in and of itself does very little to change financial behavior if not applied.

13

Therefore, the final round of the FLC competition was a scenario-based application problem. The last two teams standing were required to develop recommendations for a hypothetical Rio Grande Valley family about what types of insurance and risk management measures this family should adopt. The students from each team then had to present their recommendations to a panel of judges consisting of UTPA faculty and students as well as a State Farm agent. At the end of the third round, teams from PSJA North High School took home the first and third place prizes, and the team from San Isidro High School won second place. Each student on a winning team was awarded a cash prize that they were encouraged to use to pay for college expenses or to use as an opening deposit for a bank account.

...WE WILL MOVE TOWARD A HEALTHIER AND FINANCIALLY CAPABLE FUTURE FOR THE RIO GRADE VALLEY...

Look forward to the 2014-2015 academic year, we are looking to expand the reach of the Financial Literacy Challenge programs. State Farm has once again provided UTPA with funding to organize the High School Financial Literacy Challenge, and we are planning on reaching eight to 10 Rio Grande Valley high schools. In the upcoming academic year, the Financial Literacy Challenge will also be extended to UTPA students. A newly created sophomore-level course titled “Life & Money: Introduction to

Personal Finance” will be offered for the first time, and a series of workshops is being planned that will address personal finance topics that are relevant to college students. With high South Texas poverty rates, low levels of being “banked” in the Rio Grande Valley, increasing levels of student debt, and a lack of basic financial knowledge among a vast majority of Americans, the need for financial literacy education programs that reach out to individuals is essential. By framing personal finance problems such as repaying student loans, saving for retirement, researching and selecting suitable insurance packages, and building an excellent credit histories as goals to achieve and challenges to overcome, we will move toward a healthier and financially capable future for the Rio Grande Valley.

Dr. Terrance K. Martin is the program coordinator for the Financial Literacy Challenge and an assistant professor of Finance at The University of Texas-Pan American.

Sara K. Ray is the program assistant for the Financial Literacy Challenge at The University of Texas-Pan American and (starting Fall 2014) a Ph.D. student at Iowa State University.

Endnotes: See “Financial Literacy in the Rio Grande Valley” by Terrance K. Martin and Sara K. Ray in Border Business Briefs v.10, no. 2 for a an overview of financial literacy in the RGV.

SUMMER 2014

14 VALLEY TALENT

By Salvador Contreras

UTPA EXCELLENCE

IN SERVICE award winner BORDER BUSINESS BRIEFS

On May, 2 2014, Dr. Marie T. Mora was awarded the University’s Faculty Excellence Award in Service. This award recognized her continued service to the university and profession. The information on the right is based on her nomination letter describing her work and contributions, particularly during the past five years.

15 Marie is currently serving on two prominent committees: the Data Users Advisory Committee (DUAC) of the U.S. Bureau of Labor Statistics and the 2013-14 Texas Border Colonias Study Steering Committee of the Federal Reserve Bank of Dallas. Her work in these committees has a direct impact on the questions that researchers and policymakers can address through their ability to set data collection priorities. In addition, she has served in an advisory capacity at the highest levels of U.S. policymaking, participating in a meeting on “Jobs and the Economy” organized by the Council of Economic Advisors held at the White House on Oct. 5, 2010. In addition, she was one of six people invited from around the country to participate in a policy-briefing meeting on “Small Business and Entrepreneurship” on Feb. 13, 2012 with the Board of Governors of the Federal Reserve System in Washington, DC. Present at this meeting were Ben Bernanke (then Chair of the Fed) and Janet Yellen (then vice chair, and current chair of the Fed). In addition, she presented on Hispanic employment conditions on October 20, 2009 at the U.S. Department of Labor in Washington, DC (where then Secretary of Labor, Hilda Solis, was in attendance).

Marie has also had a profound impact in addressing issues of representation in academia. Her time as a member of the Board of the American Society of Hispanic Economists (ASHE) has been used in part to address issues affecting the pipeline and representation of Hispanics in the economics profession. She served two consecutive two-year terms as President (October 2006 through September 2010). Under her leadership ASHE received official recognition from the American Economic Association (AEA). With this official recognition, ASHE became part of the Allied Social Science Association (ASSA), resulting in, among other things, ASHE having a recurring allotted session (starting in January 2010) at the top national conference for economists — the AEA/ASSA annual meetings. Recognition from the AEA took several rounds of appeals, which she started when she first became president. This achievement was due in part to increasing the ASHE membership and national profile. Under her leadership the membership quadrupled from approximately 80 members in October 2006 to over 320 when her presidency ended. Under her leadership in 2011, ASHE became a recognized member of the Western Economic Association International (WEAI). As part of a small committee, she also started the Hispanic Economic Outlook (HEO) report (indexed in the Social Science Research Network (SSRN). In addition, Marie served as the leader of a small team that organized the Hispanic Economic Issues conference/workshop, co-sponsored by ASHE and the Americas Center at the Federal Reserve Bank of Atlanta on Nov. 19, 2010. She is currently

co-organizing the second Hispanic Economic Issues conference that will be held at the Atlanta Fed on Nov. 21, 2014. Marie served two consecutive three-year terms on the AEA’s Committee on the Status of Minority Groups in the Economics Profession (CSMGEP) between January 2008 and December 2013; she was chair in 2011. The purpose of this committee is to increase the representation of minorities in the economics profession. As chair, she instituted a refund policy for journal submission fees for presenters in sessions organized by CSMGEP at the major economics conferences. Under her leadership, CSMGEP became an affiliated member of the WEAI. In addition, she started CSMGEP-sponsored professional development sessions as regular features at the Southern Economic Association (SEA) and the WEAI annual meetings. As a Committee member, in 2012, she further initiated having CSMGEP-sponsored professional development panels at the AEA/ASSA conference. In August 2013, Marie was appointed Director of the AEA’s Economics Mentoring Program (currently funded by the National Science Foundation). This program is one of the key programs of CSMGEP, created to address the underrepresentation of minorities who are entering and/or completing doctorate degrees in economics.

...UNWAVERING NEED FOR ACTION IN THE FACE OF DISPARITIES...

In addition, Marie co-organized and led regional conferences on Economic Issues Affecting Hispanic and African American Communities in Fall 2008, Fall 2009, and Fall 2010 at the Department of Economics at Texas A&M University. The “price of admission” to participate in these conferences was for each faculty member to bring an undergraduate student interested in learning more about economics graduate programs.

Marie has organized numerous sessions at the top conferences in the economics profession, including the AEA/ASSA annual meetings, the Southern Economics Association (SEA) annual meetings, and the WEAI annual conferences. Further, Marie’s service includes being a member of the National Advisory Board for the Robert Wood Johnson Foundation Center for Health Policy at the University of New Mexico (since 2008), a mentor in the Diversity Initiative for Tenure in Economics (DITE) Program (sponsored by Duke University’s Research Network on Racial and Ethnic Inequality, the National Science Foundation, and Duke University’s Office of the Provost, 2008-2011), and an Editorial Board Member of Social Science Quarterly (since Fall 2005), among others. Her impact of her service to The University of Texas – Pan American is immeasurable.

At UTPA, she is currently the Team Leader of the Advancement as well as the Education and Empowerment components of UTPA’s ADVANCE Program. ADVANCE

is a five-year, $3.1 million institutional transformation program funded by the National Science Foundation that is under the leadership of UTPA’s Provost and Vice President for Academic Affairs Dr. Havidán Rodríguez (since Fall 2012). She has played a critical role in the development of the ADVANCE Leadership Institute and the ADVANCE Administrative Fellows Program.

The Institute is an integrated leadership development program that trains the next generation of academic leaders at UTPA. She co-founded UTPA’s Women’s Faculty Network (WFN), which had its first meeting on Dec. 6, 2012. Marie became the lead person developing the WFN listserve in Summer 2013, formed the WFN Leadership Team in early Fall 2013, and led the efforts to draft the WFN bylaws in Fall 2013 (approved by the provost on Dec. 5, 2013, thus institutionalizing the WFN). As part of her work, the WFN now enjoys representation on the Academic Affairs Executive Team and the Academic Affairs Leadership Team. Marie has also organized several WFN workshops, including those involving professional development. In the 201314 academic year, 43% of all tenured/tenure-track women at UTPA (along with lecturers, clinical faculty, and professional staff members) participated in WFN meetings/workshops. In her capacity of vice provost fellow for faculty affairs since January 2013, she has overseen several faculty development programs, including the Faculty Development Funding Program, the Junior Faculty Travel Support Program, the New Academic Leaders Support Program, among others. Marie has been an active member of the Faculty Senate since Fall 2010, and joined the Faculty Senate Executive Committee as Parliamentarian in May 2013. She is also an active member of the Faculty Development Council, serving as chair in 2012-2013, and as Secretary in 20132014. Moreover, in the 2013-2014 academic year, she served as one of two UTPA faculty representatives on the Project South Texas New University Presidential Search Committee for the University of Texas System.

Marie’s service extends to chair of the College Research and Faculty Development Committee (2012-2013), chair of College Tenure and Promotion Committee (2010-2011 and 2011-2012), chair of the College Full Professor Promotion Committee (2011-2012 and 2012-2013), chair of the College Council (20082009 and 2011-2012), and chair of the MBA Program Policy and Curriculum Committee (2009-2010), among other College and Department level service activities.

It is evident that Marie is an extraordinary leader who demonstrates a strong commitment to her students, community, and profession. Her service is defined by an unwavering need for action in the face of disparities, roadblocks and lack of equity. Marie’s service is testament of commitment for excellence.

SUMMER 2014

16 PERSONAL AND SMALL BUSINESS FINANCE

By Alejandro Serrano

mint.com A BIG APP FOR YOUR PERSONAL FINANCE AND SMALL BUSINESS Back in 2005, Mint.com was started by Aaron Patzer as a tool to manage his personal budget. Since, Mint incorporates breakthrough technologies that help the user link his financial accounts, in 2009, it was acquired by Intuit, the makers of QuickBooks. Mint is an interface that can be used to track all your credit cards, bank information, loans, and investments. This is not only a convenient website where you can see all your accounts at once it also helps you reach your financial goals.

The budget section allows you to create a budget along several categories such as travel, utilities, restaurants, etc. The amounts allocated to each category can be set up once, monthly, or every few months. If you are below the maximum, there will be a bar with a green color showing how much you have spent and the maximum. Once you reach the maximum, the bar turns red. In this section, you can also observe your income, the amount spent, and savings.

The app is free and very easy to set up. You will need to link all your financial information. This is done by entering your bank or credit card company with the username and password of each account. To minimize the risk of getting your account hacked and exposing all your financial information, Mint has a 128-bit encryption and is verified by TRUSTe and VeriSign. In fact, Mint argues that linking all your accounts to their website will increase your level of security because you will receive an email for any abnormal behavior in any of your accounts. Furthermore, even if someone logs into your Mint account, they will only be able to read information, none of your login information is displayed. Also, Mint does not store any login information of your accounts.

The first page is an overview of your accounts. In this page, you can see all the alerts and upcoming bills with a due date. This is a useful tool because you do not need to keep track of all your accounts. On the left side, you can also observe your accounts, assets, and your net income for the past five months. If you set up a budget, it will show the monthly budget and whether your expenses are within your expectations.

There are six other tabs in addition to the overview of accounts. The second tab is for transactions and it shows the aggregated transactions of all your accounts.

You can see all the financial charges that credit cards are getting from you.

Hopefully, this can serve as motivation to reduce your credit card debt. You can sort the information based on the date, description (vendor name), category, and amount.

BORDER BUSINESS BRIEFS

You can also establish financial goals. Mint shows 10 categories from paying off debt to buying a car; it also allows you how to create your own financial goal. If you want to pay off your outstanding credit balances, Mint will retrieve information from your bank and will show you the minimum payments and the corresponding APRs. However, they do not have all the information and sometimes you have to enter this information after going through your financial statements. But once you enter all the information, Mint will show your overall minimum payment. If you choose to pay above the minimum payment, it will tell you which credit card you should payoff first, which credit card is more convenient for purchases, and which credit card has the most available credit.

17

There is an interactive bar that shows how much faster you can pay off your debt by increasing your minimum payment.

The fifth section shows your spending, income, net income, assets, debts, and net worth. You have several options to select the time frame but the default option is the monthly. If you want to see your spending over time, Mint will show you a graph with the daily spending. There are other options to study your spending based on category or merchant. You can even export this information to excel.

The investments tab will show you the current value of your stock and its relation to the S&P 500. This tool is an excellent way to keep track of your retirement funds. Most of us select just one retirement plan and review it only casually. Mint will keep you updated on the performance of your funds. The last section is called “ways to save� but it only shows some credit card offers that might be of some benefit.

In general, Mint is an excellent personal finance tool that saves time because it aggregates all your accounts into a single interface. The high level of encryption and the read only functionality keeps your financial information safe.

All applications that ask for your personal information should be evaluated carefully before you use them. This article is a review opinion of mint.com and is not an endorsement of their services, company, or products. Use extreme caution and do your homework before you give out your personal information.

Dr. Alejandro Serrano is assistant professor of Finance at The University of Texas-Pan American.

SUMMER 2014

18 TOURISM

By Penny Simpson

WINTER TEXANS AND the valley economy For more than 50 years the Rio Grande Valley has been blessed with an influx of snowbirds each winter. These snowbirds, more affectionately called “Winter Texans” generally descend on the RGV from northern areas of the U.S. and Canada to live for three weeks to six months in the more than 300 adult communities, including RV/mobile home parks in the Valley. While here, Winter Texans enjoy the weather, the friendly people, the local restaurants, many social activities created just for them, and they spend money, both in Mexico and in the Valley.

The Business and Tourism Research Center (utpa.edu/businessresearch) has studied retired Winter Texans in the Valley for more than 25 years. The center has mainly focused on analyzing their economic impact. However, the Valley’s Winter Texans have served as the subject of other topics of research. For example, one study examined how satisfied various groups, including Winter Texans, local residents and Mexican Nationals, were with the RGV. The study found that the Winter Texans were the most likely group to be satisfied with the RGV and to promote the area through positive word of mouth. Another study compared Winter Texans’ activities while in the RGV with those at their hometown to find which activities are most important to the Winter Texans at both location Winter Texans reported a greater overall life satisfaction while in the RGV than in their hometowns. A more recent study examined the importance of specific RV/mobile home characteristics to the satisfaction and well-being of Winter Texans.

According to the Center, the Valley has seen anywhere from 71,000 Winter Texans in 1986-1987 to a high of 144,000 in 2009-2010. Each year they’ve been in the Valley, the Winter Texans have spent from $92 million in 1986-1987 to $803 million in 20092010.

BORDER BUSINESS BRIEFS

The center recently completed its preliminary Winter 2014 study. The preliminary results showed that each Winter Texan household spent more than ever while in the Valley; an estimated $13,370 per household, with $9,640 spent on routine, monthly purchases. The Winter Texans spent the most money (31%) on housing.

This high percentage isn’t surprising considering that 57% of the Winter Texans own a house, mobile home or condo in the Valley.

The Winter Texans also contribute and spending money in Mexico’s Texans spent about $170 per trip while in the Valley in 2014. This

to the Mexico economy by shopping border towns. In 2013-2014, Winter and made about 5.3 trips to Mexico translates to about $900 per household.

Considering the economic impact that Winter Texans have on the Valley and its neighboring Mexico towns, recent studies have raised a concern about the declining numbers of Winter Texans coming to the Valley. While results are preliminary, the 2014 Winter Texan study has found that the number of Winter Texans has declined from 69,500 households (133,400 Winter Texans) in 2012 to about 53,000 households (100,000 Winter Texans). This means that although the average expenditures of Winter Texans in the Valley is up to about $13,370 per household from $10,800 in 2012, the total direct dollar contribution of Winter Texans to the Valley economy has declined to $710 million from a high of $803 in 2009-2010.

Dr. Penny Simpson is the director of Business and Tourism Research Center, associate dean for Graduate Education and Research, and professor of Marketing at The University of Texas-Pan American

19

Clothes 4% Entertainment 5%

AVERAGE EXPENDITURES PER HOUSEHOLD 16,000

Utilities 7% Housing 31% PROPORTION OF RGV MONTHLY EXPENDITURES

12,000

8,000

Other 14%

4,000

Doctor 2% Sightseeing 1% Other 4%

20 11 -1 2 20 13 -1 4

20 07 -0 8 20 09 -1 0

20 02 -0 3 20 04 -0 5 20 05 -0 6

20 00 -0 1

0 19 98 -9 9

Grocery 14%

19 94 -9 5 19 96 -9 7

Medical 8%

19 91 -9 2 19 92 -9 3

Transportation 7%

DIRECT DOLLAR CONTRIBUTIONS 900

Prescriptions Pe rscriptions 19%

700

500

PROPORTION OF MEXICO SPENDING PER TRIP Dining 10%

Dental 47%

300

4 -1

20

13

2 -1

0 -1

11 20

09 20

8

6

-0 07 20

-0

5 -0

05 20

04 20

3 -0 02 20

20

00

-0

1

9

7

-9 98 19

5

-9 96 19

-9

3 -9

94 19

92 19

91 19

Shopping 17%

-9

2

100

SUMMER 2014

For more information, visit us at utpa.edu/cbest.

Follow us on Twitter @BorderEconomy.

1201 W. Univerisity Drive, Edinburg, TX 78539 | cbest@utpa.edu | utpa.edu/cbest