the housing market impacts of shale gas development using data from pennsylvania and an array of empirical techniques to control for confounding factors we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source well productivity and visibility results indicate large negative impacts on nearby groundwater dependent homes while piped water dependent homes exhibit smaller positive impacts suggesting benefits from lease payments results have implications for the debate over regulation of shale gas development jel l71 q35 q53 r31 technological improvements in the extraction of oil and natural gas from unconventional sources have transformed communities and landscapes and brought debate and controversy in the policy arena shale gas plays underlying the populated northeastern united states were thought to be uneconomical less than ten years ago but now contribute a major share of us gas supply 1 natural gas has been hailed as a bridge to energy independence and a clean future because of its domestic sourcing and compared with coal and petroleum derivatives its smaller carbon footprint and reduced emissions of other pollutants e g particulates sulfur dioxide car

do mergers increase product variety evidence from radio broadcasting mergers can reduce costs and alter incentives about how to position products so that theory alone cannot predict whether mergers will increase product variety we document the effect of mergers on variety by exploiting the natural experiment provided by the1996 telecommunications act we find that consolidation reduced station entry and increased the number of formats available relative to the number of stations we find some evidence that increased concentration increases variety absolutely based on the programming overlap of jointly owned stations we can infer that the effects operate through product crowding that is consistent with spatial preemption

the impact of the london olympics announcement on property prices this study estimates the impact of the london 2012 olympics announcement on property prices using a self constructed dataset of a sample of property transactions it is estimated that properties in host boroughs are sold between 2 1 and 3 3 per cent higher depending on the definition of the impact area a similar investigation based on radius rings suggests that properties up to three miles away from the main olympic stadium sell for 5 per cent higher it is estimated that the overall impact on the price of properties in host boroughs amounts to 1 4 billion having substantial social and financial implications for existing residents

private values of risk tradeoffs at superfund sites housing market evidence on learning about risk this paper incorporates a bayesian learning model into a hedonic framework to estimate the value that residents place on avoiding cancer risks from hazardous waste sites we show that residents are

interim news and the role of proxy voting advice this paper examines the information content and consequences of third party voting advice that arrives as news at an interim stage in corporate proxy contests we first document significant stock returns around announcements of proxy vote recommendations we then develop a multiequation empirical procedure for disentangling the price impact of prediction effects changes in contest outcome probabilities from the price impact of certification effects changes in outcome contingent valuations both effects are present in the data voting advice is both predictive about contest outcomes and informative about the ability of dissidents to add value consequently proxy advice plays a dual informational role

a dynamic approach to estimating hedonic prices for environmental goods an application to open space purchase if housing markets exhibit slow adjustment to system shocks then hedonic estimates of the price impact from environmental amenity trends may be time variant this paper suggests an alternative to the cross sectional model for estimating hedonic prices using an error correction approach that allows for endogenous environmental quality the model is applied to data concerning an open space purchase program in boulder colorado and shows that the economic impact of an open space purchase takes several years to be fully realized this observation questions using cross sectional hedonic models for evaluating willingness to pay for time trended environmental amenities

valuing nuclear energy risk evidence from the impact of the fukushima crisis on u s house prices abstract behavioral economics suggests that individuals overweight recent unexpected and or rare events when updating beliefs this study investigates the effect of such an event the fukushima nuclear crisis in 2011 on the learning process of a local environmental risk by evaluating how perceptions of the risk of a nuclear accident are capitalized into house prices near nuclear power plants npps in the u s our results provide new evidence on the dynamics of the effect spatially the impact was concentrated in a 4 km radius around npps and temporally it peaked a half year later and dissipated one year after the crisis

efficiency of public goods provision in space abstract this article incorporates a political decision process into an urban land use model to predict the likely location of a public good it fills an important gap in the literature by modeling the endogenous location of open space the article compares open space decisions made under a majority rules voting scheme with welfare improving criterion and finds households tied to a location in space compete for public goods significant differences emerge between the two decision criteria indicating that requiring referenda for open space decisions is likely to lead to inefficient outcomes specifically many open space votes are likely to fail that would lead to welfare improvements and any open space decisions that do pass will require amenities larger than needed to achieve the social optimum the more dispersed and large the population the larger the gap between the socially efficient level and the level needed for a public referendum to pass

price discrimination and retail configuration the hypothesis that price discrimination based on willingness to pay for quality can occur in multifirm markets is confirmed using microdata on gasoline retailing a test that discriminates between price structures associated with discrimination and with cost driven competitive differentials is developed and implemented with controls for variation in outlet and market characteristics a second test based on profitability variation rejects a competitive peak load pricing explanation for the observed price dispersion the data suggest that price discrimination at the retail level adds at least 9 a gallon to the average price of full service gasoline

explaining the appearance and success of open space referenda many communities in the united states have begun enacting policies to preserve open space often through local voter referenda new jersey sponsors such municipal action through the green acres program by providing funding and low interest loans to towns that choose to increase property taxes and spend the money raised on open space preservation for the purposes of conservation and or recreation this paper endeavors to understand which factors contribute to the appearance and success of these measures although previous literature has examined this issue this is the first study to account for spatial dependence spatial autocorrelation and to explore dynamic issues through survival analysis the traditional two stage model from the literature is extended by incorporating a bayesian spatial probit for the first stage and a maximum likelihood spatial error model in the second stage a cox proportional hazard model is used to examine the timing of referenda appearance spatial dependence is found in the second stage of the analysis indicating that future studies should account for its influence there is no strong evidence for spatial dependence or correlation in the first stage the survival model is found to be a useful complement to the traditional probit analysis of the first stage

a novel approach to identifying hedonic demand parameters abstract this note presents a new solution to the classic problem with using hedonic price functions to recover demand curves unexpected changes in the composition of a differentiated product can generate instruments that support a simple reduced form approach to demand estimation

executive remuneration in the eu the context for reform this paper shows how clear divergences arise across the eu in how executive remuneration is structured sharp differences also occur in the adoption of best practices in pay setting and in the disclosure of executive pay these divergences are broadly in line as agency theory predicts with blockholding and dispersed ownership governance profiles while the eu has recently adopted two important 2004 recommendations on executive pay the paper argues that eu led reforms should be undertaken with care harmonization should be limited and only address disclosure disclosure is central to the adoption of effective incentive contracts in that it can manage the particular agency costs of executive pay across dispersed and blockholding systems without intervening in governance choices and structures any other interventions in the pay process carry the risk of distorting competition and interfering with the dynamics of different ownership structures and economic contexts

political advertising and election results we study the persuasive effects of political advertising our empirical strategy exploits fcc regulations that result in plausibly exogenous variation in the number of impressions across the borders of neighboring counties applying this approach to detailed data on television advertisement broadcasts and viewership patterns during the 2004 12 presidential campaigns our results indicate that total political advertising has almost no impact on aggregate turnout by contrast we find a positive and economically meaningful effect of advertising on candidates vote shares taken at face value our estimates imply that a one standard deviation increase in the partisan difference in advertising raises the partisan difference in vote shares by about 0 5 percentage points evidence from a regression discontinuity design suggests that advertising affects election results by altering the partisan composition of the electorate

a forward looking ricardian approach do land markets capitalize climate change forecasts abstract the hedonic pricing method is one of the main approaches used to estimate the economic value of attributes that affect the market price of an asset this method is routinely used in environmental economics to derive the economic valuation of environmental attributes such as air pollution and water quality for example the ricardian approach is based on a hedonic regression of land values on historical climate variables forecasts of future climate can then be employed to estimate the future costs of climate change we show that this approach is only valid if current land markets ignore climate forecasts while this assumption was defensible decades ago when this literature first emerged it is reasonable to hypothesize that information on climate change is so pervasive today that markets may already price in expectations of future climate change indeed we show empirically that agricultural land markets in the united states now capitalize expectations about future climate change we derive a straightforward empirical correction to the standard ricardian approach called the forward looking ricardian approach that can be implemented with readily available data accounting for market beliefs decreases the estimated magnitude of climate change damages by 50 62

driving to opportunity local rents wages commuting costs and sub metropolitan quality of life we examine variation in local rents wage levels commuting costs household characteristics and amenities within metropolitan areas for 2071 areas covering the united states by density and central city status we demonstrate the sensibility of estimating wage levels by workplace not residence and recover decentralized rent gradients that fall with commuting costs we construct and map a willingness to pay index which indicates the quality of life typical households receive from local amenities when households are similar mobile and informed this index varies considerably within metros and is typically high in areas that are dense suburban sunny mild safe entertaining and have elevated school funding

equilibrium behavior in the conservation easement game conservation easements allow landowners to collect earnings from their land while reducing their tax burdens because the land cannot be sold into development conservation assures open space amenities for nearby residents however the residents bear a tax increase that offsets the owner s tax reduction we develop a gametheoretic model of the private monetary incentives induced by conservation easement programs and use an experiment to verify that conservation decisions are made based on private incentives and without consideration of the public goods conservation provides this implies that unless land trusts are discriminating conservation easements need not lead to optimal conservation and may even reduce social welfare

estimating the marginal willingness to pay function without instrumental variables abstract the hedonic model of rosen 1974 has become a workhorse for valuing the characteristics of differentiated products despite a number of well documented econometric problems including a source of endogeneity that has proven difficult to overcome here we outline a simple likelihood based estimation approach for recovering the marginal willingness to pay function that avoids this endogeneity problem using this framework we find that marginal willingness to pay to avoid violent crime increases by sixteen cents with each additional incident per 100 000 residents accounting for the slope of the marginal willingness to pay function has significant impacts on welfare analyses

quasi experimental evidence on the effect of aircraft noise on apartment rents inferring the implicit price of an environmental good hinges on ceteris paribus conditions that are often hard to justify this paper uses an unexpected change in flight regulations as source of exogenous variation and identifies aircraft noise effects from price adjustments in the market for rental apartments controlling for spatial and apartment heterogeneity we find that aircraft noise reduces apartment rents by about 0 5 per decibel our results indicate i that noise discounts are overestimated in cross sectional studies because aircraft noise tends to be negatively correlated with omitted neighborhood and housing amenities and ii that noise effects are unlikely to be constant over the entire noise range

an analysis of the use of accounting and market measures of performance in executive compensation contracts prior research has provided useful insights into the structure of compensation plans and their incentive effects however one important limitation of these studies is the virtual absence of any cross sectional analyses of the attributes of compensation contracts 2 this absence is related in part to the problems associated with controlling for other factors that affect compensation that is compensation contracts are

marginal property tax effects of conservation easements a vermont case study conservation easements allow landowners to transfer their land s development rights to another entity usually a nontaxable conservation organization conservation reduces the town s tax base necessitating a tax rate increase to maintain service levels however conserving land also decreases the supply of developable land and provides open space amenities that may be capitalized into the value of nearby properties these effects may offset the decrease in the tax base caused by the easement using a sample of twenty nine vermont towns we show that private conservation easements increase property tax rates in the short run but are tax neutral or tax suppressing in the long run

testing the present value relation for housing prices should i leave my house in san francisco abstract we examine the efficiency of residential housing markets by examining price rent and cost of capital indices generated from a transactions level data base for alameda and san francisco counties in northern california we can reject both constant and nonconstant discount rate versions of the housing price present value relation in the short run long run results are consistent with the housing price present value relation when we adjust the discount factor for changes in both tax rates and borrowing costs that characterize our 1970 1988 sample period our preferred explanation for the short run rejection of but long run consistency with the present value model is the high transaction costs that characterize the housing market however we cannot rule out the possibility that deviations of actual and present value price are due to asset market bubbles or nonrational expectations

does hazardous waste matter evidence from the housing market and the superfund program this paper uses the housing market to develop estimates of the local welfare impacts of superfund sponsored cleanups of hazardous waste sites we show that if consumers value the cleanups then the hedonic model predicts that they will lead to increases in local housing prices and new home construction as well as the migration of individuals that place a high value on environmental quality to the areas near the improved sites we compare housing market outcomes in the areas surrounding the first 400 hazardous waste sites chosen for superfund cleanups to the areas surrounding the 290 sites that narrowly missed qualifying for these cleanups we find that superfund cleanups are associated with economically small and statistically insignificant changes in residential property values property rental rates housing supply total population and types of individuals living near the sites these findings are robust to a series of specification checks including the application of a regression discontinuity design based on knowledge of the selection rule overall the preferred estimates suggest that the local benefits of superfund cleanups are small and appear to be substantially lower than the 43 million mean cost of superfund cleanups

panel data hedonics rosen s first stage as a sufficient statistic traditional cross sectional estimates of hedonic price functions can recover marginal willingness to pay for characteristics but face endogeneity problems for estimating non marginal welfare measures i show that when panel data on household demands are available one can construct a second order approximation to non marginal welfare measures using only the first stage marginal prices with repeated cross sections of product prices the measure can be set identified or under a single crossing restriction point identified bounds also can be constructed when there are mobility costs finally a variant remains valid when individual preferences shift over time

do capitalization effects for public goods reveal the public s willingness to pay this article develops a welfare theoretic framework for interpreting evidence on the impacts of public programs on housing markets we extend rosen s hedonic model to explain how housing prices capitalize exogenous shocks to public goods and externalities the model predicts that trading between heterogeneous buyers and sellers will drive a wedge between these capitalization effects and welfare changes we test this hypothesis in the context of changes in measures of school quality in five metropolitan areas results from boundary discontinuity designs suggest that capitalization effects understate parents willingness to pay for public school improvements by as much as 75

learning in a hedonic framework valuing brownfield remediation incomplete information in property value hedonic models can bias estimates of marginal willingness to pay mwtp using brownfield remediation as an application this article recovers hedonic values from a dynamic neighborhood choice framework that allows households to learn about brownfield contamination in a bayesian fashion before choosing where to live i find that ignoring learning yields nontrivial biases to the mwtp estimate this has important implications for hedonic valuation if agents are imperfectly informed estimates are used to calculate information s value had it been withheld from the public and to assess heterogeneity in information s value along site and homebuyer demographics

which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities abstract the hedonic property value model is among our foremost tools for evaluating the economic consequences of policies that target the supply of local public goods environmental services and urban amenities we design a theoretically consistent and empirically realistic monte carlo study of whether omitted variables seriously undermine the method s ability to accurately identify economic values our results suggest that large gains in accuracy can be realized by moving from the standard linear specifications for the price function to a more flexible framework that uses a combination of spatial fixed effects quasi experimental identification and temporal controls for housing market adjustment

communities competition spillovers and open space we explore the impact of the spatial distribution of developers on the private provision of open space our analysis yields three main findings first we demonstrate that the mixed public good nature of open space relative to private lot consumption can lead a single land rent maximizing developer to over supply open space relative to the utility maximizing level second by explicitly incorporating the spatial distribution of open space spillovers we show how competition can lead not only to inefficient levels of open space but also to inefficiencies in its spatial distribution finally we evaluate the impact of market based open space instruments

spring cleaning rural water impacts valuation and property rights institutions the brief summarizes the spring cleaning rural water impacts valuation and property rights institutions the first two rounds of spring protection occurred in january april 2005 and august november 2005 the author measure health impacts of spring protection an investment that improves source water quality the author also estimate households valuation of spring protection and simulate the welfare impacts of alternatives to the current system of common property rights in water which limits incentives for private investment spring infrastructure investments reduce fecal contamination by 66 percent but household water quality improves less due to recontamination child diarrhea falls by one quarter travel cost based revealed preference estimates of households valuations are much smaller than both stated preference valuations and health planners valuations and are consistent with models in which the demand for health is highly income elastic the author estimate that private property norms would generate little additional investment while imposing large static costs due to above marginal cost pricing private property will function better at higher income levels or underwater scarcity and alternative institutions could yield pareto improvements

the effect of emission information on housing prices quasi experimental evidence from the european pollutant release and transfer register in this paper we study whether the release of pollutant emission information has an effect on housing prices the event under study is the publication of the first wave of emission quantity data from the european pollutant release and transfer register in 2009 our analysis is based on quarterly housing prices at the german postal code level for the years 2007 2011 and provides the first evidence from europe on this research question estimating a differences in differences model and controlling for observable differences in land use housing type distribution tax revenues and other postal code area characteristics by means of propensity score matching we find no significant effect of the release of emission information on the value of houses in affected postal code areas this result survives a number of robustness checks designed to assess whether our findings are due to data aggregation issues or the actual treatment definition this leads to the conclusion that on an aggregate level the 2009 publication of e prtr data did not have an immediate and noticeable effect on housing prices in germany

the value of a healthy home lead paint remediation and housing values abstract the presence of lead paint significantly impairs cognitive and behavioral development yet little is known about the value to households of avoiding this residence specific environmental health risk in this paper we estimate the benefits of lead paint remediation on housing prices using data on all homes that applied to a hud funded program in charlotte north carolina we adopt a difference in differences estimator that compares values among remediated properties with those for which an inspection does not identify a lead paint hazard results indicate large returns for public and private investment in remediation with each 1 spent on lead remediation generating 2 60 in benefits as well as a reduction in residential turnover

linking the price of agricultural land to use values and amenities the recent appreciation in agricultural land values across the united states has raised a number of important questions for farmers farmland owners lenders and policy makers while traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns previous research has shown that agricultural land values are actually driven by a complex set of factors this study leverages the unique characteristics of a national land based usda survey on farmland values and cash rents to estimate broad national level determinants of the market value of cropland and pastureland our results support past research findings that indicate farmland values are only partially explained by agricultural returns we find that multiple nonagricultural attributes of farmland also contribute to the market value

price discrimination and bargaining empirical evidence from medical devices many important issues in business to business markets involve price discrimination and negotiated prices situations where theoretical predictions are ambiguous this paper uses new panel data on buyer supplier transfers and a structural model to empirically analyze bargaining and price discrimination in a medical device market while many phenomena that restrict price discrimination are suggested as ways to decrease hospital costs e g mergers group purchasing organizations and transparency i find that 1 non discriminatory pricing actually works against hospitals because competition is more intense under price discrimination and 2 results depend ultimately on a previously unexplored bargaining effect

a test for allocative efficiency in the local public sector abstract this paper develops a test for pareto efficiency in the local public sectorusing the analytical result that aggregate property value is maximized at the public output level which satisfies the samuelson condition for efficiency by using cross section data it is possible to deduce whether a representative community provides its public goods in a property value maximizing and hence efficient fashion the empirical results show no systematic tendency to either under or over provide public goods in a sample of massachusetts communities

dealer price discrimination in new car purchases evidence from the consumer expenditure survey this paper documents the variation in dealer discounts for new cars using transactions price data from the consumer expenditure survey consumer specific characteristics fail to explain dealer discounts whereas model market specific and purchase transaction variables e g first time purchase trade in and financing through dealer do explain them the results contradict earlier findings of race and gender discrimination based on a controlled experiment this contradiction is reconciled by examining the higher moments of the empirical discount distribution while mean and median markups do not vary by race and gender minority purchases are characterized by higher dispersion this may rationalize the disparate treatment of minorities by dealers documented in the controlled experiment

do households prefer small school districts a natural experiment author affiliation h spencer banzhaf hsbanzhaf gsu edugarima bhalla gbhalla live unc edu acknowledgment we thank rajashri chakrabarti rob fleck jason fletcher john pepper jesse rothstein holger sieg david sjoquist todd sorensen christiana stoddard randall walsh anonymous referees and participants of a session at the 2006 southern economic association meetings and seminars at montana state university and the university of pittsburgh for valuable comments 1 introductionperennial discontent with the quality of public education in the united states is a constant motivation for new educational reforms one potential reform is to break up large urban school districts into smaller districts 1 this proposal emerges from two lines of logic first large districts may suffer from substantial diseconomies of scale a recent review of the evidence concludes that diseconomies may emerge in districts with as few as 15 000 students andrews duncombe and yinger 2002 see also barrow and rouse 2004 and duncombe miner and ruggiero 2005 by comparison the urban districts of new york city los angeles and chicago handle as many as 1 1 million 727 000 and 421 000 students respectively a second line of logic is that breaking up large school districts would provide more choice for households in particular the smaller districts may be differentiated horizontally with some emphasizing math others reading others specific extra curricular courses and so forth since smaller districts can respond better to parental input these differences can reflect local tastes additionally the new districts would have to compete with one another for students enhancing their incentive to improve their performance borland and howsen 1992 hoxby 2000 hanushek and rivkin 2003 sandstrom and bergstrom 2005 these reforms are subject to a market test following the logic of tiebout 1956 households should respond to exogenous changes in public goods by voting with their feet that is moving into improving communities and bidding up prices 2 consequently if households perceive that decentralizing large school districts is desirable for any of these reasons we would expect the ceteris paribus demand for housing to increase in school districts undergoing such reforms relative to nearby substitutes this article examines just such a market test studying the effect on local real estate markets surrounding the april 2000 breakup of the los angeles unified school district lausd into 11 subdistricts this breakup was only partial insofar as official authority remained vested in a single school board nevertheless the breakup delegated substantial power to a more local level creating 11 new superintendents and devolving authority over educational policy and curricula to the new subdistricts we employ a difference in differences hedonic methodology comparing changes in real estate prices before and after the breakup announcement within the lausd area to price changes in nearby districts our approach has three distinct advantages first the october 1999 announcement of the breakup plan was abrupt and surprising and was swiftly followed by official passage in april 2000 because the announcement was so abrupt and so well covered by the media we have an excellent proxy for households expectations and it is expectations after all that govern market behavior our proxies for expectations are based on the announcement date the implementation date and in some models an index of newspaper coverage second few of the benefits of the reform would be likely to spill over into other school districts making the lausd border a sharp boundary defining relevant control groups third the lausd area is not coextensive with the city of los angeles but rather includes some 24 cities this implies that any other potentially confounding political events over the period would affect real estate markets in only a portion of the lausd rather than the whole area a possibility that we can test

mergers when prices are negotiated evidence from the hospital industry in recent years many hospitals have merged in part to gain bargaining leverage with managed care organizations mcos we investigate the price impact of hospital mergers by formulating and estimating an equilibrium bargaining model between hospital systems and managed care health insurers over prices for inpatient services we estimate the parameters of the model using claims and discharge data from northern virginia in 2006 inova health system proposed to acquire prince william hospital we nd that this merger would have raised prices signicantly and that the remedy of separate bargaining imposed by the ftc in a separate hospital case would have resulted in a larger price increase

competition between networks a study of the market for yellow pages this paper estimates the importance of network effects in the market for yellow pages i estimate three simultaneous equations consumer demand for usage of a directory advertiser demand for advertising and a publisher s first order condition derived from profit maximizing behaviour estimation shows that advertisers value consumer usage and that consumers value advertising implying a network effect i find that internalizing network effects would significantly increase surplus as an application i consider whether the market benefits from monopoly which takes advantage of network effects or oligopoly which reduces market power i find that a more competitive market is preferable copyright 2004 wiley blackwell

advertising effects in presidential elections presidential elections provide both an important context in which to study advertising and a setting that mitigates the challenges of dynamics and endogeneity we use the 2000 and 2004 general elections to analyze the effect of market level advertising on county level vote shares the results indicate significant positive effects of advertising exposures both instrumental variables and fixed effects alter the ad coefficient advertising elasticities are smaller than are typical for branded goods yet significant enough to shift election outcomes for example if advertising were set to zero and all other factors held constant three states electoral votes would have changed parties in 2000 given the narrow margin of victory in 2000 this shift would have resulted in a different president

new estimates of quality of life in urban areas implicit markets capture compensation for intraurban and interregional differe nces in amenities and yield differences in housing prices and wages these pecuniary differences become preference based weights in a qual ity of life index hedonic equations are estimated using microdata fr om the 1980 census and assembled county based amenity data on climati c environmental and urban conditions ranking of 253 urban counties reveals substantial variation within as well as among the 185 urba n areas the quality of life differences across counties within one s msa is almost one half of the difference between the top and bottom ranked counties in the nation copyright 1988 by american economic association

spatial hedonic models for environmental hazards and health outcomes this article examines the relationship between the total cost of services for radioprotection and the health outcomes in greece with a spatial hedonic model using data from the period 2010 to 2016

price discrimination in political advertising evidence from the 2012 presidential election in 2010 the us supreme court loosened contribution limits to political action committees pacs sparking fears that big donors could exert outsize influence on elections by funding pac advertising however pacs are potentially handicapped when buying advertising time data from 2012 reveal that pacs pay 32 above regulated campaign rates i estimate a model of demand for advertising by pacs exploiting the misalignment of state and media market borders to address price endogeneity i find that prices reflect willingness to pay for viewer demographics rather than media bias the estimates further suggest that network owned stations discriminate more successfully than do local affiliates

property value capitalization and municipal open space referenda this paper first develops a theory of demand for land conservation in the presence of price effects due to both amenity creation and housing supply restriction three hypotheses designed to distinguish demand for amenities from homeowner rent seeking are based upon 1 renters 2 the quality of another locally provided good schools and 3 spatial autocorrelation of funding across municipalities econometric results suggest an observable degree of demand for open space measures is nonenvironmental in motivation efficiency and policy implications are discussed along with a recommendation for benefit cost analysis capable of separating nonrival amenities from other interests to certify open space measures jel h41 q24

the welfare effects of bundling in multichannel television markets we measure how the bundling of television channels affects short run welfare we estimate an industry model of viewership demand pricing bundling and input market bargaining using data on ratings purchases prices bundles and input costs we conduct simulations of a la carte policies that require distributors to offer individual channels for sale to consumers we estimate that negotiated input costs rise by 103 0 percent under a la carte these higher input costs offset consumer benefits from purchasing individual channels mean consumer and total surplus change by an estimated 5 4 to 0 2 percent and 1 7 to 6 0 percent respectively jel d12 l11 l51 l82 m31

implicit prices of soil characteristics for farmland in iowa arguments have long persisted that purchasers pay too much for poor land i e less productive more erosive relative to the higher quality counterpart in other words purchasers are either irrational or poorly informed relative to the differences in land productivity between poor and good farmland similar arguments have been advanced concerning the willingness to pay rent on the part of tenant operators little empirical evidence exists to support or reject this hypothesis farmland appraisals are sometimes cited as evidence to support the contention but such empiricism may indicate more about the quality and biases of appraisers than about the behavior or efficient functioning of the farmland market resolution of this issue is extremely important to the formation of soil conservation policy designed to protect soil productivity irrational behavior on the part of land purchasers may lead one to infer that the market system is failing to recognize adequately the soil productivity consequences of soil erosion if this oversight consistently leads to excessive soil erosion from society s perspective then some form of government intervention may be necessary to protect the welfare of society assuming that such intervention is capable of correcting the market failure

an embarrassment of riches confronting omitted variable bias and multiscale capitalization in hedonic price models abstract many researchers have addressed concerns of omitted variable bias in hedonic price models through the use of spatial fixed effects we argue that this approach does not consider the biases introduced by effects that overlap the zone of capitalization for nonmarket goods we show this bias can dominate the usual omitted variable bias using data on developer provided open space we control for multiscale capitalization and omitted variables simultaneously by extending the hausman taylor estimator where the panel component of the estimator is defined over repeated transactions within neighborhoods rather than the traditional definition following a unique cross sectional unit through time

evidence of variable discount rates and non standard discounting in mortality risk valuation time discounting is central to the valuation of future health and mortality risks in public sector allocative decision making particularly for environmental policies with delayed health impacts using a risk risk trade off survey we elicit discount rates for fatality risks and establish discounting functional forms on both a sample and an individual level we find wide variation in implicit discount rates for fatality risk between individuals as well as between individual heterogeneity in discounting functional forms in aggregate the sample is best characterised by subadditive discounting our work has implications for the academic investigation of intertemporal choice involving mortality risks and potentially for the evaluation of policy options with delayed mortality risk outcomes a thought experiment cautions against the standard practice of assuming that exponential discounting characterises society s time preferences

the impact of performance based compensation on misreporting abstract this paper examines the effect of ceo compensation contracts on misreporting we find that the sensitivity of the ceo s option portfolio to stock price is significantly positively related to the propensity to misreport we do not find that the sensitivity of other components of ceo compensation i e equity restricted stock long term incentive payouts and salary plus bonus have any significant impact on the propensity to misreport relative to other components of compensation stock options are associated with stronger incentives to misreport because convexity in ceo wealth introduced by stock options limits the downside risk on detection of the misreporting

are ceos really paid like bureaucrats a common view is that there is little correlation between firm performance and ceo pay using a new fifteen year panel data set of ceos in the largest publicly traded u s companies we document a strong relationship between firm performance and ceo compensation this relationship is generated almost entirely by changes in the value of ceo holdings of stock and stock options in addition we show that both the level of ceo compensation and the sensitivity of compensation to firm performance have risen dramatically since 1980 largely because of increases in stock option grants

democracy and environmental quality we develop and estimate an econometric model of the relationship between several local and global air pollutants and economic development while allowing for critical aspects of the socio political economic regime of a state we obtain empirical support for our hypothesis that democracy and its associated freedoms provide the conduit through which agents can exercise their preferences for environmental quality more effectively than under an autocratic regime thus leading to decreased concentrations or emissions of pollution however additional factors such as income inequality age distribution education and urbanization may mitigate or exacerbate the net effect of the type of political regime on pollution depending on the underlying societal preferences and the weights assigned to those preferences by the state

social stigma and asset value recent attempts by economists to identify and quantify the effect of social stigma on asset value have often been stymied by confounding mechanisms i use the unique circumstances surrounding the 1999 columbine shooting to estimate the effect of social stigma on asset value using a difference in differences model with property fixed effects i find the immediate effect of stigma from the columbine shooting is 5 7 of a property s value after one year this implies a 13 million loss from property sales in the year 2000 alone the results are robust to numerous specifications and synthetic control placebo tests this suggests that social stigma plays a role in consumer preferences

swinging for the fences the effects of ceo stock options on company risk taking and performance we unpack the concept of managerial risk taking distinguishing among three of its major elements the size of an outlay the variance of potential outcomes and the likelihood of extreme loss we

the effect of legalizing retail marijuana on housing values evidence from colorado does legalizing retail marijuana generate more benefits than costs this paper provides a first step toward addressing that question by measuring the benefits and costs that are capitalized into housing values we exploit the time series and cross sectional variations in the adoption of colorado s municipality retail marijuana laws rmls and examine the effect on housing values with a difference in differences strategy our estimates show that the legalization leads to an average 6 increase in housing values indicating that the capitalized benefits outweigh the costs in addition we find suggestive evidence that this relatively large housing value appreciation is likely due to rmls inducing strong housing demand while having no discernible effect on housing supply finally we show that the effect of rmls is heterogeneous across locations and property types jel k20 r28

estimates of the impact of crime risk on property values from megan s laws abstract we estimate the willingness to pay for reductions in crime risk using the location and move in dates of sex offenders we find significant effects of sex offenders locations that are geographically localized house prices within 0 1 miles of a sex offender fall by 4 percent on average we then use this finding to estimate the costs to victims of sexual offenses and find costs of over 1 million per victim far greater than previous estimates however we cannot reject the alternative hypotheses that individuals overestimate risks posed by offenders or that living near an offender poses significant costs exclusive of crime risk jel k42 r23 r31

amenity benefits and the optimal allocation of land agricultural land often yields sig nificant amenity benefits that may not be re flected in the prevailing allocation of land be tween agricultural and nonagricultural uses this paper introduces a simple supply demand model that incorporates these benefits in the de termination of optimal land allocation three stage least squares and county level data are used to estimate the supply and demand param eters these estimates confirm the plausibility of the conceptual model results from the con tingent valuation literature illustrate the extent of underallocation of land to agriculture due to existing institutional conditions some correc tive measures and their distributional effects are discussed and quantified jel q24

landscape amenities and local development a review of migration regional economic and hedonic pricing studies abstract with rapid urban expansion and loss of open space attractive local landscapes will continue to gain importance in location decisions and on political agendas the present study reviews the evidence on the local economic role of landscape amenities from two major strands of empirical research migration and regional economic models and hedonic pricing models following common amenity definitions we identify 71 relevant peer reviewed studies and systematically assess the reported effects of the landscape amenity variables the migration and regional economic studies suggest that migrants are attracted by amenities nearly as often as by low taxes reported effects of amenities on income and employment are less consistent the hedonic studies suggest that nature reserves and land cover diversity have mostly open space and forest often and agricultural land rarely positive effects on housing prices studies at larger geographic scales and studies involving urban areas were more likely to identify significant amenity effects some limitations of the evidence may be overcome with better datasets and modeling approaches however in line with other recent work the limitations also highlight the need for complementary information from the analysis of political preferences for land use management

values in the wind a hedonic analysis of wind power facilities the siting of wind facilities is extremely controversial this paper uses data on 11 331 property transactions over nine years in northern new york state to explore the effects of new wind facilities on property values we use a fixed effects framework to control for omitted variables and endogeneity biases we find that nearby wind facilities significantly reduce property values in two of the three counties studied these results indicate that existing compensation to local homeowners communities may not be sufficient to prevent a loss of property values jel q51 q53

the benefits of avoiding cancer or dying from cancer evidence from a four country study abstract we use stated preference methods to estimate the cancer value per statistical life vsl and value per statistical case vscc from a representative sample of 45 60 year olds in four countries in europe we ask respondents to report information about their willingness to pay for health risk reductions that are different from those used in earlier valuation work because they are comprised of two probabilities that of getting cancer and that of dying from it conditional on getting it in the first place the product of these two probabilities is the unconditional cancer mortality risk our hypothetical risk reductions also include two severity related attributes quality of life impacts and pain the results show that respondents did appear to have an intuitive grasp of compound probabilities and took into account each component of the unconditional cancer mortality risk when answering the valuation questions we estimate the cancer vsl to be between approximately 2 and 5 950 million depending on whether the unconditional mortality risk was reduced by lowering the chance of getting cancer increasing the chance of surviving cancer or both the vscc is estimated to be up to 0 578 million euro and its magnitude depends on the initial conditional cancer mortality and on the improvement in survival the survey responses show that our measures of cancer severity impacts on daily activities and pain have little or no effect on the wtp to reduce the adverse health risks

measuring the property value effects of local land use and preservation referenda this paper examines a massachusetts policy that encourages communities to raise money through referenda for preservation and affordable housing i use difference indifferences fixed effects and quantile regression to compare home prices before and after such referenda in two towns i include covariates representing existing land uses zoning and historic resources to estimate the value of these amenities standard regression techniques indicate weak effects of the referenda while the estimated coefficients on land use and historic preservation confirm that preservation has a positive effect on property values the quantile regression sheds light on some heterogeneity that goes unnoticed in standard regression results

ease vs noise long run changes in the value of transport dis amenities for a complete cost benefit analysis of durable infrastructures it is important to understand how the value of non market goods such as transit time and environmental quality changes as incomes rise in the long run we use difference in differences and spatial differencing to estimate the land price capitalization effects of metro rail in berlin germany today and a century ago over this period the negative implicit hedonic price of rail noise tripled our results imply income elasticities of the value of noise reduction and transport access of 2 2 and 1 4 substantially exceeding cross sectional contingent valuation estimates

unlocking amenities estimating public good complementarity abstract public goods may exhibit complementarities that are essential for determining their individual value our results indicate that improving safety near parks can turn them from public bads to goods ignoring complementarities may lead to i undervaluing the potential value of public goods ii overestimating heterogeneity in preferences and iii understating the value of public goods to minority households recent reductions in crime have unlocked almost 7 billion in property value in chicago new york and philadelphia still two fifths of the potential value of park proximity 10 billion remains locked in

evidence of the effects of water quality on residential land prices we use hedonic techniques to show that water quality has a significant effect on property values along the chesapeake bay we calculate the potential benefits from an illustrative but limited water quality improvement and we calculate an upper bound to the benefits from a more widespread improvement many environmental hedonic studies have almost entirely ignored the potential for omitted variables bias the possibility that pollution sources in addition to emitting undesirable substances are likely to be unpleasant neighbors we discuss the implications of this oversight and we provide an application that addresses this potential problem o 2000 acadcmic prcss

housing market fluctuations and the implicit price of water quality empirical evidence from a south florida housing market in this study we utilize a hedonic property price analysis to examine changes in the implicit price of water quality given housing market fluctuations over time we analyze martin county florida waterfront home sales from 2001 to 2010 accounting for the associated significant real estate fluctuations in this area through flexible econometric controls in space and time we apply a segmented regression methodology to identify housing market price instability over time interact water quality with these identified market segmentations and embed these interactions within a spatial fixed effect model to further account for any spatial heterogeneity in the waterfront market results indicate that water quality improvement is associated with higher property values we find no evidence that the economic downturn crowded out concern for the water quality in this area we further impute an implicit prices of 2614 evaluated at the sample mean for 1 point increase in the water quality grade

residential property price differentials of waste plants evidence from beijing china as a primary source of urban pollution waste plants release toxic gases and polluted waste water that can cause great harm to human health and contaminate water resources the adverse impact of wa

voting on open space what explains the appearance and support of municipal level open space conservation referenda in the united states abstract numerous communities in the united states have been willing to use public funds to protect open space the amount of money allocated for open space protection by local and state governments exceeds the budget of the largest federal land protection program in the u s the conservation reserve program this paper analyzes what types of municipalities hold open space referenda and the level of support for these referenda factors that increased the probability of a municipality holding an open space referendum from 2000 to 2004 were large population low population density rapid growth of the surrounding area and highly educated and environmentally concerned residents increases in median household income up to 100 000 increased the likelihood of a vote but further increases in income beyond 100 000 decreased the likelihood for municipalities holding an open space referendum factors that increased support for passage of the referendum were rapid growth low unemployment rates highly educated residents and no new taxes given high levels of support for open space referenda 76 of municipal level referenda held from 2000 through 2004 passed the spatial pattern of locally managed open space will be largely determined by the factors that affect referenda appearance on a municipal ballot this conclusion suggests that locally managed conservation hotspots will cluster around fast growing affluent communities with highly educated residents such hotspots may or may not align with overall conservation priorities non governmental and environmental organizations should focus efforts on helping communities in locally managed conservation coldspots secure open space

a new approach to computing hedonic equilibria and investigating the properties of locational sorting models abstract this paper outlines a new way to solve the traditional housing market assignment problem and uses it to investigate the properties of hedonic equilibria our approach to computing equilibria is based on rosen s 1974 bid function it has four desirable features i convergence implies a hedonic equilibrium ii convergence is guaranteed if a hedonic equilibrium exists iii it can solve for a new equilibrium following a shock to the market and iv if multiple equilibria exist it can identify them the algorithm is applied to micro data from san joaquin county california where the choice of a home provides access to public schools in particular school districts first we calibrate the algorithm to approximately reproduce actual housing prices in san joaquin county as a hedonic equilibrium then we introduce a policy that improves school quality in selected school districts we find that there are several possibilities for the new equilibrium for each of these potential equilibria we compare the marginal willingness to pay for school quality with the rate at which the improvement is capitalized into property values the resulting capitalization rates differ substantially from marginal willingness to pay

interpreting common stock returns around proxy statement disclosures and annual shareholder meetings numerous studies have analyzed the stock market reaction to information released in proxy statements two possible biases in proxy statement research are suggested frequently misspecification of the return benchmark and a sample selection bias from analyzing only clean events this paper presents evidence that most of the conclusions of existing studies are not affected by these potential biases a significantly positive abnormal return was found around a random sample of shareholder meeting dates the result indicates that interpreting event study results for announcements occurring around annual shareholder meetings must be conducted carefully the results are consistent with the findings of kalay and loewenstein 14 who argue that risk and expected return can increase around predictable information producing events alternatively the study can be viewed as being consistent with several recent studies that find anomalous results using daily return data and large samples

what do property values really tell us a hedonic study of underground storage tanks hedonic property value models are widely used but are susceptible to potentially invalid conjectures based on the assumed measure of environmental quality this paper focuses on an application where this is of particular concern leaking underground storage tanks i estimate a hedonic model using quasi experimental and spatial econometric techniques similar to previous studies i examine how house prices vary with distance to the disamenity this approach yields little evidence that prices are adversely impacted however to better measure risks i utilize home specific data on groundwater well tests and correspondence from regulators and find an 11 depreciation when households are well informed

linking pay to performance compensation proposals in the s p 500 we study the proposal of manager sponsored compensation plans linking pay to performance by sp g34 j33