urban land price the extraordinary case of honolulu hawaii the price of land in honolulu is higher than in any other major us urban area this paper examines several determinants of the supply and demand for land and discusses their likely influence on honolulu s land price it utilises comparisons between demand and supply conditions in honolulu and in the forty most populous us urban areas to ascertain the strength of the respective determinants the regression results confirm that natural and institutional constraints restricting the supply of land play an important role in determining price in honolulu and in the forty city sample

endogenous discounting the world saving glut and the u s current account abstract we study the evolution of the u s current account in a two country dynamic stochastic endowment model in which a single non state contingent bond is the only internationally traded asset the paper focuses on the world saving glut as the primary cause of continual deterioration in the current account and departs from the standard framework by introducing a three parameter model of the subjective discount factor that depends on societal per capita variables that are external to household choices when agents in the model are presented with u s and rest of world endowment data as the realization of the exogenous state vector endogenously driven short run international differences in subjective discounting that display increasing relative u s impatience create saving and current account imbalances that matches patterns observed in the data

energy security in bangladesh perspective an assessment and implication energy is a key indicator of the nation s overall economic as well as social development looking at the present energy demand scenario in bangladesh electricity demand has significantly increased over the past years most of the bangladesh s power plants are heavily dependent on expensive imported fossil fuel energy resources thus the power failure has become an acute problem for the country and adversely affects the socio economic development of the country consequently the shortage and constraint in availability of fossil fuels appeal to boost up the renewable energy sector in bangladesh in order to bring down the gap between demand and supply hence decisive steps to reform the power sector with a mandate to oversee these sectors urgently need to overcome current energy crisis facing in the country in this paper efforts have been made to summarize the availability current status strategies perspectives promotion policies major achievements and future potential of energy options in bangladesh

rebound effect in china evidence from the power generation sector abstract when talking about energy conservation rebound effect re is always concerned which defined as the increasing energy consumption relative to the counterfactual predicted by technological progress because of efficiency induced decrease in the real price of energy services in this paper we try to find a way to figure out the re through calculating the substitution relations accord with the definition based on the trans log cost function and considering the asymmetric impact on energy cost share equation the paper applies allen uzawa substitution elasticity to establish the price oriented analysis diagram of fossil energy consumption re using time series data applying the joint method of the dynamic ols dols and the seemingly unrelated regressions sur the re in china s electricity generation sector is estimated the results showed that the re is 11 6 in china s electricity generation sector if allowing for asymmetric price effects which indicates that china s power generation sector generally displays a feature of energy saving

is there an energy efficiency gap many analysts have argued that energy efficiency investments offer an enormous win win opportunity to both reduce negative externalities and save money this overview paper presents a simple model of investment in energy using capital stock with two types of market failures first uninternalized externalities from energy consumption and second forces such as imperfect information that cause consumers and firms not to exploit privately profitable energy efficiency investments the model clarifies that only if the second type of market failure cannot be addressed directly through mechanisms such as information provision energy efficiency subsidies and standards may be merited this chapter therefore reviews the empirical work on the magnitude of profitable unexploited energy efficiency investments a literature which frequently does not meet modern standards for credibly estimating the net present value of energy cost savings and often leaves other benefits and costs unmeasured these problems notwithstanding recent empirical work in a variety of contexts implies that on average the magnitude of profitable unexploited investment opportunities is much smaller than engineering accounting studies suggest finally there is tremendous opportunity and need for policy relevant research that utilizes randomized controlled trials and quasi experimental techniques to estimate the returns to energy efficiency investments and the welfare effects of energy efficiency programs

the misuse of net present value in energy efficiency standards abstract consumers are often blamed for not making necessary investments in energy efficient durables despite that these investments have positive net present value npv several papers have argued that when investments have option like characteristics e g irreversibility uncertainty flexible timing and lumpiness the aphorism invest if the net present value of investing exceeds zero isn t the best advice yet curiously the department of energy doe in the united states proposes new regulations mandating higher energy efficiency standards for consumer durables on the basis of non negative npv over an investment s lifetime in this paper we provide a step by step deconstruction of doe s npv methodology and show that doe s method purges volatility volatility persistence and nonstationarity that are otherwise present in energy prices as a result doe s projections of future energy prices are artificially smooth and statistically biased casting serious doubt on the reliability of the magnitude of energy savings from energy efficient durables

estimating direct and indirect rebound effects for u s households with input output analysis part 2 simulation abstract this is the second part of a two part paper that integrates economic and industrial ecology methods to estimate the indirect rebound effect from residential energy efficiency investments we apply the model developed in part one to simulate the indirect rebound given an estimate of the direct rebound using a 2002 environmentally extended input output model and the 2004 consumer expenditure survey in 2002 for the u s we find an indirect rebound of 5 15 in primary energy and co 2 e emissions assuming a 10 direct rebound depending on the fuel saved with efficiency and household income the indirect rebound can be as high as 30 40 in no x or so 2 emissions for efficiency in natural gas services the substitution effect modeled in part one is small in most cases and we discuss appropriate applications for proportional or income elasticity spending assumptions large indirect rebound effects occur as the u s electric grid becomes less carbon intensive in households with large transportation demands or as energy prices increase even in extreme cases there is limited evidence for backfire or a rebound effect greater than 100 enacting pollution taxes or auctioned permits that internalize the externalities of energy use would ensure that rebound effects unambiguously increase consumers welfare

estimating direct and indirect rebound effects for u s households with input output analysis part 1 theoretical framework abstract this is the first part of a two part paper providing an analytical model of the indirect rebound effect given a direct rebound estimate that integrates consumer demand theory with the embodied energy of household spending from environmentally extended input output analysis the second part applies the model developed in part one to simulate the direct and indirect rebound for the average u s household in terms of primary energy co2e nox and so2 emissions and for energy efficiency investments in electricity natural gas or gasoline services part one provides a critical review of the largely independent economic and industrial ecology literatures on the indirect rebound by studying the two goods case and the n goods case we demonstrate that the indirect rebound is bounded by the consumer budget constraint and inversely related to the direct rebound we also compare the common proportional spending and income elasticity spending assumptions with our model of cross price elasticities including both substitution and income effects for the indirect rebound by assuming zero incremental capital costs and the same embodied energy as conventional technologies for efficient appliances we model an upper bound of the indirect rebound future work should also consider the increase in consumer welfare possible through the rebound effect

land values and housing rents in urban japan abstract this paper describes and systematically explains observed variation in land values and housing rents in urban japan it fits a structural model s reduced form equations to intertemporal data over 35 years intercity data across 27 major cities and intracity data in the three largest metropolitan areas explanatory variables are population income their growth rates the interest rate the inflation rate urban land supply and distance from the city center

indeterminacy and sunspots with constant returns recently there has been a renewed interest in the possibility of indeterminacy and sunspots or alternatively put in the existence of a continuum of equilibria that arises in dynamic economies with some market imperfections much of the research in this area has been concerned with the empirical plausibility of indeterminacy in markets with external effects or with monopolistic competition and which exhibit some degree of increasing returns while the early results on indeterminacy relied on relatively large increasing returns and high markups more recently benhabib and farmer 1996a showed that indeterminacy can also occur in two sector models with small sector specific external effects and very mild increasing returns

a general equilibrium assessment of rebound effects in this paper we use a general equilibrium model applied to a national economy norway to explore the potential for energy efficiency improvements to trigger economic forces that offset potential savings from using more efficient technologies rebound effects two types of energy efficiency improvements electricity and oil are introduced into various sectors of the economy our results suggest significant and surprising differences across sectors concerning both energy use and consequences for the build up of greenhouse gases rebound effects are found to be quite significant for manufacturing sectors since long term consumption of energy undergoes minor reductions or increases in response to efficiency improvements in other sectors rebound effects appear to be weak or almost absent

market imperfections and the instability of open economies in the presence of small market imperfections the transitional dynamics of an open economy can become indeterminate in that there exist an infinite number of equilibrium paths converging to a unique steady state in contrast to closed economy models in the open economy such indeterminacy can arise independently of the curvature of the utility function in consumption the results suggest that with market imperfections open economies can be subject to fluctuations caused by randomness unrelated to the economy s fundamentals

opec s oil exporting strategy and macroeconomic in stability aguiar conraria and wen 2008 argued that dependence on foreign oil raises the like lihood of equilibrium indeterminacy economic instability for oil importing countries we argue that this relation is more subtle the endogenous choices of prices and quantities by a cartel of oil exporters such as the opec can aect the directions of the changes in the likelihood of equilibrium indeterminacy we show that uctuations driven by self ful lling expectations under oil shocks are easier to occur if the cartel sets the price of oil but the re sult is reversed if the cartel sets the quantity of production these results oer a potentially interesting explanation for the decline in economic volatility i e the great moderation in oil importing countries since the mid 1980s when the opec cartel changed its market strategies from setting prices to setting quantities despite the fact that oil prices are far more volatile today than they were 30 years ago

indeterminacy and increasing returns abstract we investigate properties of the one sector growth model with increasing returns under two organizational structures capable of reconciling the existence of aggregate increasing returns with competitive behavior by firms the first involves input externalities the second involves monopolistic competition we show for parameters in close accord with recent literature on real business cycles that the model displays an indeterminate steady state that can be exploited to generate a model of business fluctuations driven by self fulfilling beliefs in our first class of models growth is generated by exogenous increases in factor productivity in the second class the marginal product of capital is large enough for endogenous growth journal of economic literature classification numbers e00 e3 o40

the allocative cost of price ceilings in the u s residential market for natural gas a direct consequence of restricting the price of a good for which secondary markets do not exist is that in the presence of excess demand the good will not be allocated to the buyers who value it the most we demonstrate the empirical importance of this allocative cost for the u s residential market for natural gas which was subject to price ceilings during 1954 89 using a household level discrete continuous model of natural gas demand we estimate that the allocative cost in this market averaged 3 6 billion annually nearly tripling previous estimates of the net welfare loss to u s consumers

electricity demand in multi family renter occupied residences this paper focuses on multi family renter occupied housing where the landlord provides major appliances a large residential sector that has not received widespread attention in the literature experimental data are used from a test where one group of households was billed directly for the electricity they consumed while a control group had unlimited electric service included as part of the monthly rent the empirical analysis yields short run demand estimates that satisfy to a remarkable extent the ceteris paribus assumptions of demand analysis this is the case for two reasons 1 the households did not individually execute the appliance choice decision at various unknown times in the past and 2 the stock of appliances upon which the derived short run demand is conditional is identical for all households in the sample a second important feature is emphasis on functional form examined in some detail is the question of the appropriate functional form for residential electricity demand finally empirical results of the analysis are used to investigate the cost effectiveness and welfare effects of installing submeters in existing multi family residences

preferences endogenous discount rate and indeterminacy in a small open economy model abstract this paper characterizes indeterminacy conditions for a small open economy business cycle model the preferences are the utility function commonly used in closed economy models in the literature coupled with an endogenously determined discount rate it shows that indeterminacy can occur under arbitrarily small external effects independently of the intertemporal elasticities in consumption and labor supply

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

durable goods and residential demand for energy and water evidence from a field trial this article describes a household production model in which energy efficient durable goods cost less to operate so households may use them more the model is estimated using household level data from a field trial in which participants received high efficiency clothes washers free of charge the estimation strategy exploits this quasi random replacement of washers to derive precise estimates of the household production technology and a demand function for clothes washing during the field trial households increased clothes washing on average by 5 6 after receiving a high efficiency washer implying a price elasticity of 06 the complete model is used to evaluate the cost effectiveness of recent changes in minimum efficiency standards for clothes washers

empirical evidence of direct rebound effect in catalonia this paper reviews the empirical literature concerning the direct rebound effect in households it briefly analyzes the main theoretical and methodological aspects and finally estimates the magnitude of direct rebound effect for all energy services using electricity in households of catalonia spain using econometric techniques the main results show an estimated direct rebound effect of 35 in the short term and 49 in the long term the existence of a rebound effect reduces the effectiveness of energy efficiency policies

price effects of energy efficient technologies a study of residential demand for heating and cooling energy efficient appliances reduce the marginal price of the services they deliver this article shows empirically that such price reductions result in energy savings that are smaller than those engineering techniques generally project using econometric techniques with data from a unique utility experiment and a detailed engineering thermal load model we find that actual conservation is as much as 13 below engineering estimates for cooling and 8 12 below for heating customers who conserve electricity are also persistent their houses are comparatively warmer in summer and cooler in winter

do energy efficiency investments deliver evidence from the weatherization assistance program a growing number of policies and programs aim to increase investment in energy efficiency because conventional wisdom suggests that people fail to take up these investments even though they have positive private returns and generate environmental benefits many explanations for this energy efficiency gap have been put forward but there has been surprisingly little field testing of whether the conventional wisdom is correct this article reports on the results of an experimental evaluation of the nation s largest residential energy efficiency program the weatherization assistance program conducted on a sample of approximately 30 000 households in michigan the findings suggest that the upfront investment costs are about twice the actual energy savings furthermore the model projected savings are more than three times the actual savings although this might be attributed to the rebound effect when demand for energy end uses increases as a result of greater efficiency the article fails to find evidence of significantly higher indoor temperatures at weatherized homes even when accounting for the broader societal benefits derived from emissions reductions the costs still substantially outweigh the benefits the average rate of return is approximately 7 8 annually

balanced budget consumption taxes and aggregate stability in a small open economy in a small open economy facing a perfect world capital market this paper shows that if the government follows a balanced budget fiscal policy based on endogenous consumption tax rates then the steady state is saddle path stable and hence beliefs driven aggregate instability can be ruled out this result is in contrast to those obtained in some closed economy models and it suggests that unrestricted world capital mobility can help stabilize the economy under the balanced budget fiscal policy based on consumption taxation

energy efficiency and household behavior the rebound effect in the residential sector over the years various efficiency policies have been designed and implemented to reduce residential energy consumption however it is very common that the policy expectations that are based upon engineering calculations do not come true the widely accepted explanation for the gap between expectation and the realization is the change of household behavior as the energy efficiency gains change the perceived cost of energy services and thereby generate shifts in consumption patterns the rebound effect the real controversy about the rebound effect lies in the identification of its magnitude in this paper we estimate the rebound effect in residential energy consumption by comparing the actual gas consumption levels with the ex ante predictions within a sample of well over 600 000 dutch dwellings and households we find a significant deviation between the engineering predictions and the households actual energy consumption a difference which varies by ownership wealth income and the actual gas use intensity our results show a rebound effect of 26 7 percent among home owners and 41 3 percent among tenants moreover we find that these effects are greatest among the lower income wealth groups and among households that tend to use more gas than average

interactions in swiss households energy demand a holistic approach abstract this article analyzes the interactions and possible trade offs between direct energy consumption and embodied energy requirement of households in switzerland in order to assess the net impacts of standard energy policies focusing exclusively on direct energy use direct and embodied energy demand of swiss households are estimated by combining consumption data of a national expenditure survey with data on energy intensity from life cycle analysis using a system of equations and an instrumental variable approach we find that both domains are driven by same determinants but that there is no evidence for significant substitution between them we also find an increasing effect of income on both domains with particularly important effects on embodied energy from a policy perspective our findings highlight a concern that economic growth could bring about an increasing global energy demand through energy requirement for non energy commodities however the wide spread policies targeting direct energy are unlikely to cause a substantial shift in household consumption to embodied energy

returns to residential energy efficiency and conservation measures a field experiment abstract residential energy conservation is a key component of contemporary energy and climate change policy in the us and elsewhere comparisons of the relative effectiveness of measures aimed at reducing residential energy consumption are made challenging however by the endogeneity of technology and energy use decisions in this paper we describe a novel small scale field experiment that uses randomized treatments to estimate the returns to three types of energy conservation measures in institutionally owned homes the results from the experiment indicate considerable reductions in natural gas consumption associated with the installation of attic insulation and the provision of incentives for conservation the results are supported by observations of ambient indoor temperature data which show that households receiving incentives significantly reduce their temperature settings especially when coupled with access to a programmable thermostat the study will ideally provide guidance for institutions and communities considering energy efficiency measures and for future researchers designing randomized experiments to study residential energy use

economy wide rebound effects for non energetic raw materials material efficiency is increasingly being seen as a means to save resources and achieve greater security of supply whether these aims can be achieved to the desired extent depends among other things on the presence of rebound effects this article estimates economy wide rebound effects for non energetic raw materials in the context of a set of material efficiency projects carried out in germany under the assumption that the efficiency technologies developed in these projects are scaled up to the national level input output analysis is used to calculate changed material requirements and corresponding rebound effects reduced material flows in monetary terms together with economic data are aggregated to an economy wide impulse which can cause re increases in the demand for the considered raw materials depending on the project specific framework conditions and subject to the modeling assumptions our estimates suggest that individual materials display a wide range of rebound effects ranging from close to zero to low double digit percentages these results point towards the conclusion that economy wide rebound effects do not make these efficiency measures obsolete however they also suggest that rebound effects should not be ignored in the assessment of the role of efficiency in future resource consumption

balanced budget income taxes and aggregate stability in a small open economy abstract in a closed economy a balanced budget fiscal policy rule with endogenous income tax rates can generate aggregate instability due to self fulfilling expectations e g schmitt grohe and uribe 1997 this paper shows both analytically and numerically that beliefs driven aggregate instability associated with such a balanced budget rule is less of a problem in a small open economy integrated in the world asset and goods markets this is because cross border capital flows and endogenous international price adjustments produce income effects that reduce the likelihood of sunspot equilibria from a policy perspective our results relieve possible concerns that balanced budget rules and reliance on income taxes to achieve budget objective could have destabilizing effects on the economy

evaluating energy efficiency investments accounting for risk in the discounting process a prominent feature of the literature regarding the economics of energy conservation is the debate over the existence and nature of the so called efficiency gap a frequent subject of debate is whether consumers apply a reasonable discount rate when evaluating the future benefits of energy efficiency measures a key aspect of the discounting debate is the manner in which consumer attitudes toward risk are accounted for when discounting this paper suggests that an appropriate approach to incorporating risk into the evaluation of energy efficiency projects would yield higher net benefits to such projects than standard evaluation techniques we argue that analysing the purchase of fuel saving capital as though it were a standard investment in a physical asset obscures an important feature of the decision rather than deciding whether or not to invest in an asset with an uncertain future benefit stream the consumer is actually choosing between two future cost streams each of which is uncertain this seemingly minor change in perspective has important implications for how the risk associated with fuel saving capital should be brought into the discounting process an example based on lighting technologies is used to illustrate the principles discussed

trade structure and belief driven fluctuations in a global economy abstract this paper constructs a dynamic two country model with country specific production externalities and inspects the presence of equilibrium indeterminacy under alternative trade structures it is shown that the presence of belief driven economic fluctuations caused by equilibrium indeterminacy is closely related to the specified trade structure if investment goods are not internationally traded and international lending and borrowing are allowed then indeterminacy arises in a wider set of parameter space than in the corresponding closed economy by contrast either if both consumption and investment goods are traded in the absence of international lending and borrowing or if only investment goods are traded with financial transactions then the indeterminacy conditions are the same as those for the closed economy counterpart

sample truncation in fha data implications for home purchase indexes the home purchase index is the single most important price series in the consumer price index cpi in december 1980 for example the relative importance of home purchase in the cpi for all urban consumers was 10 3 percent another component of homeownership cost contracted mortgage interest had a weight of 9 8 percent in the cpi the mortgage cost index is computed as the product of the home purchase index and an index of mortgage interest rates thus a ten percent increase in measured home purchase prices is sufficient to increase the all items cpi by approximately two percent the importance of the home purchase index places great value on the accuracy of its measurement however the index is one of the most often criticized of all cpi series the primary objections result from the decision by the bureau of labor statistics bls to base the index on sales data provided by the federal housing administration fha these fha data have been employed in numerous econometric studies including analyses of housing demand 14 place to place house price indexes 16 and the substitutability of land and capital in the production of housing services 18 at the same time the fha samples are widely recognized to be unrepresentative of the universe of house sales with possible distorting effects in some applications also in recent years the home purchase index has differed markedly from other national level house price indexes published by the u s bureau of the census and the national association of realtors 2 probably the most critical problem with the fha data base results from the program s ceilings on the size of insurable mortgages these ceilings historically have

economic modelling of energy services rectifying misspecified energy demand functions abstract although it is well known that energy demand is derived since energy is required not for its own sake but for the energy services it produces such as heating lighting and motive power energy demand models both theoretical and empirical often fail to take account of this feature in this paper we highlight the misspecification that results from ignoring this aspect and its empirical implications biased estimates of price elasticities and other measures and provide a relatively simple and empirically practicable way to rectify it which has a strong theoretical grounding to do so we develop an explicit model of consumer behaviour in which utility derives from consumption of energy services rather than from the energy sources that are used to produce them as we discuss this approach opens up the possibility of examining many aspects of energy demand in a theoretically sound way that have not previously been considered on a widespread basis although some existing empirical work could be interpreted as being consistent with this type of specification while this formulation yields demand equations for energy services rather than for energy or particular energy sources these are shown to be readily converted without added complexity into the standard type of energy demand equation s that is are typically estimated the additional terms that the resulting energy demand equations include compared to those that are typically estimated highlight the misspecification that is implicit when typical energy demand equations are estimated a simple solution for dealing with an apparent drawback of this formulation for empirical purposes namely that information is required on typically unobserved energy efficiency indicates how energy efficiency can be captured in the model such as by including exogenous trends and or including its possible dependence on past energy prices the approach is illustrated using an empirical example that involves estimation of an aggregate energy demand function for the uk with data over the period 1960 2011

indeterminacy in a small open economy ramsey growth model abstract this paper presents a small open economy version of the j benhabib and r e a farmer 1996 j monet econ 37 421 443 two sector optimal growth model with production externalities it is shown that indeterminacy is considerably easier to obtain under a regime of perfect world capital markets than in the closed economy variant furthermore the result is not dependent on a high labor supply elasticity since that input is fixed the paper also examines a variant which takes into account external borrowing constraints and it is shown that the qualitative results on indeterminacy remain basically unaffected by this extension journal of economic literature classification numbers e32 f12

energy saving and energy efficiency concepts for policy making departing from the concept of rational use of energy the paper outlines the microeconomics of end use energy saving as a result of frugality or efficiency measures frugality refers to the behaviour that is aimed at energy conservation and with efficiency we refer to the technical ratio between energy input and output services that can be modified with technical improvements e g technology substitution changing behaviour from one side and technology from the other are key issues for public energy policy in this paper we attempt to identify the effects of parameters that determine energy saving behaviour with the use of the microeconomic theory the role of these parameters is crucial and can determine the outcome of energy efficiency policies therefore policymakers should properly address them when designing policies