willingness to pay for quality improvements comparative statics and interpretation of contingent valuation results this paper extends variation function theory by examining the effects of changes in prices quality and income on willingness to pay for quality change comparative static effects are found for both on site users and nonusers of the resource these results are used to interpret contingent valuation empirical models for example the substitution and complementary relationships between trips to natural resource sites can be identified this paper also suggests tests for comparison of contingent valuation with recreation demand models and other tests of validity

theoretical and empirical advantages of truncated count data estimators for analysis of deer hunting in california truncated poisson and truncated negative binomial count data models as well as standard count data models ols nonlinear normal and truncated nonlinear normal mle were used to estimate demand for deer hunting in california the truncated count data estimators and their properties are reviewed a large sample n 2223 allowed random segmenting of the data into specification estimation and out of sample prediction portions statistics of interest are therefore unbiased by the specification search and the prediction results allow comparison of the statistical models robustness the new estimators are found to be more appropriate for estimating and predicting demand and social benefits than the alternative estimators based on a variety of criteria

generalized travel cost model and water quality benefits a reconsideration with federal agencies required to conduct benefit cost analyses for each new major regulation analyses of water quality changes are likely to be an increasingly important part of the policymaking process a revised version of the travel cost demand model and illustrations show the importance of these revisions for the model s estimates although the magnitude of the difference in benefit estimates between the original and new versions of the model varies with the specific recreation site selected the findings indicate that the original model generally implied estimated benefits from three to over 30 times as large as the revised model this implies that judgment can play an important role in the definition and use of economic models as well as the need for better information on households recreation decisions and more complete description of recreation site characteristics 15 references 4 tables

a unified bilevel programming framework for price based market clearing under marginal pricing market clearing in restructured power systems is mostly implemented through an offer based setting with the goal of maximizing social welfare this approach leads to sound results from an economic viewpoint when generation offers reflect true production costs however offers may significantly differ from actual costs in practice thus yielding undesired distortion under a marginal pricing scheme this paper presents a general bilevel programming framework for alternative market clearing procedures dependent on market clearing prices rather than on offers the resulting nonlinear mixed integer bilevel programming formulation is transformed into an equivalent single level mixed integer linear program suitable for efficient off the shelf software the bilevel formulation is investigated through a particular instance of price based market clearing driven by consumer payment minimization this problem has recently received considerable attention due to the open challenges posed from both modeling and computational perspectives numerical results are provided to illustrate the performance of the proposed approach

theoretical and empirical specifications issues in travel cost demand studies the ultimate objective of empirical travel cost demand studies is to obtain an estimate of the welfare derived from utilizing outdoor recreational resources thus it is apparent that travel cost demand equations must be linked to utility maximization deyak and smith freeman bockstael and mcconnell hanemann bockstael hanemann and strand we specify a model of utilitymaximizing recreation demand behavior which postulates that individuals choose the total number of days that they wish to spend at the recreation site this total number of recreation days is the product of the number of trips

the socioeconomic consequences of teen childbearing reconsidered we present new estimates of the consequences of teen childbearing that take into account observed and unobserved family background heterogeneity comparing sisters who have timed their first births at different ages the estimation is conducted using data from the u s national longitudinal survey of young women excerpt

joint recreation choices and implied values of time a model of joint recreation quantity choices is developed individuals choose both total time spent at distant sites and the number of trips taken implicitly choosing average on site time the model permits nonzero marginal utility of travel makes on site time endogenous and is linear in the constraints the scarcity value of time is analyzed without assuming the marginal utility of work time is zero a partially testable assumption about relative marginal values of travel and on site time yields nonparametric calculations of the scarcity value of time and marginal values of trips and days on site from people s observed optimal quantity choices

equilibrium of interdependent gas and electricity markets with marginal price based bilateral energy trading the increasing interdependencies between natural gas systems and power systems create new business opportunities in coupled energy distribution markets this paper studies the marginal price based bilateral energy trading on the equilibrium of coupled natural gas and electricity distribution markets convex relaxation is employed to solve a multiperiod optimal power flow problem which is used to clear the electricity market a successive second order cone programming approach is utilized to solve a multiperiod optimal gas flow problem which is used to clear the gas market in addition the line pack effect in the gas network is considered which can offer storage capacity and provide extra operation flexibility for both networks in both problems locational marginal energy prices are recovered from the lagrangian multipliers associated with nodal balancing equations furthermore a best response decomposition algorithm is developed to identify the equilibrium of the coupled energy markets with bilateral gas and electricity trading which leverages the computational superiority of socps cases studies on two test systems validate the proposed methodology

zero observations and gender differences in cigarette consumption censoring mechanisms and gender differences are investigated for cigarette consumption by individuals in the usa the gaussian single hurdle model is proposed which generalizes the specifications of cragg 1971 and heckman 1979 and allows examination of the empirical relevance of the two censoring mechanisms in the existing double hurdle model the proposed model performs better than cragg s and heckman s models but not as well as the double hurdle model and also produces different elasticity estimates the hypothesis of equal consumption parameters is rejected and demand elasticities found to differ between men and women income does not play a role and age has conflicting effects on the probability and level of cigarette smoking older individuals are less likely to smoke but conditional on smoking consume more cigarettes than their younger counterparts education has negative effects on the probability and level of smoking and can be an effective tool to curtail cigarette smoking

thermal plant bids and market clearing in an electricity pool minimization of costs vs minimization of consumer payments the spanish wholesale electricity market started on january 1st 1998 though it is based on simple price quantity bids it incorporates some provisions to take thermal plant running requirements into account this paper presents these rules and its mathematical treatment focusing on a possible implementation of the minimum income condition which allows thermal generators to declare minimum stable loads it also shows another key point in the debate whether the algorithm should minimize costs or consumer payments

quasi and simulated likelihood approaches to censored demand systems food consumption by food stamp recipients in the united states a quasi maximum likelihood estimator is proposed and applied to a censored translog demand system for foods using a sample of food stamp recipients in the united states the procedure produces remarkably close parameter and elasticity estimates to those of the simulated maximum likelihood procedure a two step procedure is also considered but it produces different elasticities demands are found to be price elastic for pork and fish but price inelastic for all other food products gross complementarity and net substitutability are obvious but these cross price effects are much less pronounced than own price and total food expenditure effects copyright 2003 oxford university press

determinants of individual tourist expenditure as a network empirical findings from uruguay abstract this paper introduces the use of graphical models for assessing the determinants of individual tourist spending these models have the advantage of synthesizing and visualizing the relationships occurring within large sets of random variables through an easy to interpret output to this end individual data from a large official survey of international tourists in uruguay are used symmetric conditional independence structures are first investigated then subgraphs of each expenditure item s neighbourhood are extracted in order to assess the impact of main effects and interactions through proportional ordinal logistic regression results highlight the marginal role of socio demographic variables and direct importance of accommodation type destination and length of stay

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part ii case studies this paper presents the numerical analysis of the bilevel programming approach for revenue and network constrained market clearing developed in its companion paper the impact of minimum revenue conditions and minimum declared profits on generation and consumption levels as well as on locational marginal prices for energy is examined in detail through three case studies first the results from an illustrative example including minimum revenue conditions are comprehensively analyzed the second case study is based on the ieee reliability test system and considers minimum declared profits in the third case study a modified version of the ieee 118 bus system is tested while accounting for minimum revenue conditions in addition the computational behavior of the proposed approach is illustrated with several case studies including the ieee 300 bus system numerical results show the effectiveness of the proposed approach to handle revenue constraints as well as its superiority over the heuristic currently implemented in the iberian electricity market moreover simulations reveal that unlike previous works in the literature generation revenue constraints can be precisely incorporated in day ahead market clearing while explicitly considering the standard economic dispatch based marginal pricing scheme and without requiring price uplifts

possibilities for including the opportunity cost of time in recreation demand systems recreation demand modelers have attempted to identify and incorporate the opportunity cost of an individual s time in travel and on site in the model larson 1993b focused on the value of leisure time in a model where individuals face a fixed work week in this paper we examine the connection between labor supply and recreation demands and focus on conditional demand systems we illustrate that corner solution models are not needed to explain several interesting time related recreation issues

estimating fishing and hunting leisure spending shares in the united states abstract we apply a bivariate censored demand system to estimate hunting and fishing trip related spending shares in the united states using data from off site surveys the approach considers fishing and hunting destination decisions and includes respondents who were inactive i e did not hunt or fished in a particular season the statistical significance of correlation coefficient parameter supports the use of a joint e g bivariate rather than separate e g univariate decision modeling process for fishing or hunting share equations most individual characteristics are statistically significant as explanatory variables respondents holding recreation licenses tended to spend significantly more on recreation than those without licenses all own price and cross price elasticities are statistically significant and suggest that hunting and fishing are complements the results also suggest that the popularity of hunting may decline as the population ages

modeling food consumption decisions as a two step process this article evaluates the suitability of tobit analysis of food consumption patterns by comparing results generated by a tobit model and a modification with a two step decision process two samples of adult women were selected from the 1977 78 nationwide food consumption survey and the 1985 continuing survey of food intakes by individuals results show strong statistical evidence for questioning tobit analysis in examining food consumption decisions determinants of the decision to consume food within a particular food group often differ from the determinants of how much to consume particularly for more highly defined food groupings analysis of u s food consumption patterns and their dietary aspects with respect to consumer behavior has a long history traditionally ordinary least squares ols or some variant has been used in many studies where ols was not appropriate the tobit method was applied tobit allows for a discrete mass point for observations as well as a continuous range of values for the dependent variable this nonlinear method has yielded good results in a variety of studies e g mccracken and brandt lane and devaney and fraker this article examines the suitability of the tobit method for analysis of food consumption patterns the tobit method assumes that the decision to consume a given food item is the same as the decision about the amount of the food to consume ignoring the two step nature of the decision process may hamper understanding of true behavioral patterns lead to erroneous conclusions and generate incorrect policy recommendations this article compares results generated by a tobit model and a modification with a two step decision process in the next section the statistical methods used to test whether food consumption is a one or two step decision process are described the following sections discuss the variables and data present the results and consider the conclusions

the individual travel cost method with consumer specific values of travel time savings the treatment of the opportunity cost of travel time in travel cost models has been an area of research interest for many decades our analysis develops a methodology to combine the travel distance and travel time data with respondent specific estimates of the value of travel time savings vtts the individual vtts are elicited with the use of discrete choice stated preference methods the travel time valuation procedure is integrated into the travel cost valuation exercise to create a two equation structural model of site valuation since the travel time equation of the structural model incorporates individual preference heterogeneity the full structure model provides a travel cost site demand model based upon individualized values of time the methodology is illustrated in a study of recreational birdwatching more specifically visits to a stork village in poland we show that the usual practice of basing respondents vtts on 1 3 of their wage rate is largely unfounded and propose alternatives including a separate component of the travel cost survey aimed at valuation of respondents vtts or as a second best asking if they wish if their journey was shorter and for those who do use full hourly wage as an indicator of their vtts

estimation of censored demand equations from large cross section data the article develops an alternative econometric methodology to estimate a system of censored demand equations using a large cross section data from colombian urban households the approach preserves the behavioralinformation expressed by zero expenditures and conforms with the requirements imposed by consumer theory in a way consistent with the random utility hypothesis we motivate the choice of the tobit modelas a statistical representation of consumer behavior and introduce the methodology by specifying the aids model modified according to both a translating and scaling demographic transformation we propose to estimate each demand equation in unrestricted form using the jackknife technique we then recover the demand parameters imposing the cross equations restrictions by using minimum distance estimation the empirical results of the censored demand system for specific households of policy relevance are reported copyright 2000 oxford university press

demand systems estimation with microdata a censored regression approach demand systems estimation increasingly makes use of household level microdata mainly to measure the effects of demographic variables data based on these household expenditure surveys present a major estimation problem for any given household many of the goods have zero consumption implying a censored dependent variable techniques which do not take this censored dependent variable into account will yield biased results we utilize a censored regression approach that is computationally simple consistent and asymptotically efficient the results are then presented and compared with those obtained using an uncensored technique

revenue adequate bidding strategies in competitive electricity markets energy trading in a competitive electricity market can be modeled as a two level optimization at the top level a centralized economic dispatch ced uses a priority list method to solve the fundamental problem of reliable market clearing with price discovery the lower level consists of a set of decentralized bidding db subproblems the db model uses a self unit scheduling simulator based on parametric dynamic programming to produce hourly bid curves for the central dispatch coordinator unit operating constraints and costs such as the unit minimum up and minimum down times ramp rates and the unit start up no load and sunk capital costs are internalized in the bid curves through the simulator a special algorithm is presented to solve the revenue adequacy problem for marginal units both ced and db models are based on the revenue maximization in contrast with the cost minimization criteria used in the conventional unit commitment uc the proposed method has been tested in a study case and some interesting results have been demonstrated

reconciling models of recreational route and site choices when employing travel cost models the unit cost of the essential input travel in the household s production of a recreation experience is central to obtaining the preference structure for the recreational good however little attention has been given to the choice of the route although the route defines the monetary and time costs used to compute travel costs conventional wisdom considers time and money costs in determining the cost per mile in the estimation of site choices but does not use both in determining the route choices and mileages this paper investigates whether models of recreational site and route choices can be reconciled

an optimization model for the electricity market clearing problem with uniform purchase price and zonal selling prices electricity markets can be designed in different ways one rule that is sometimes enforced is the uniform purchase price under this pricing method all the consumers pay the same price regardless of the zone they belong to by contrast each producer receives its zonal price this asymmetry in the price paid and received makes the clearing process not easily treatable through standard optimization techniques within the framework of marginal pricing this paper shows how it is possible to formulate the market clearing problem with uniform purchase price and zonal selling prices as a computationally tractable mixed integer linear programming problem the proposed approach is tested using real data from the italian day ahead market which is actually based on the aforementioned rule

the contingent valuation and the travel cost methods applied to mucubaji lake area natural resources and environmental services act as characterized public goods because they are sources of direct utility without any associated market with related prices for instance the recreational services of the natural parks are guaranteed to the visitors by an entrance payment ticket the contingent valuation method and the travel cost method are used to define the variables referred to the visitors every season time and willingness to pay wtp in the mucubaji lake area the wtp average rose from bs 5 612 68 to bs 8 625 00 when the services were improved to the visitors it was found that travel costs have a negative impact on the expected demand for trips to the mucubaji lake area travel costs to an alternate site impact positively on that demand besides female people and independent occupation have a big expected demand for every trip to the natural park

using neoclassical consumer choice theory to produce a market map from purchase data this article presents a new model for estimating the spatial representation of objects and preference vectors from actual choice behavior of individuals or households it is based on neoclassical economic theory of consumer choice the model integrates both decisions of which good s to buy and the quantity of purchase overall preference is decomposed into price effects and intrinsic preference for the good a maximum likelihood method for estimating the model parameters is described and illustrated using choice data of ketchup brands collected by the use of electronic supermarket scanners

combining revealed and stated preferences consistency tests and their interpretations this article models the recreation demand for iowa wetlands combining survey data on both actual usage patterns i e revealed preferences rps and anticipated changes to those patterns under hypothetical increases in trip costs i e stated preferences sps we formulate and test specific hypotheses concerning potential sources of bias in each approach and discuss what can be learned about the validity of the models from such tests

a structural equations approach to modeling consumptive recreation demand abstract in this analysis we develop a two equation structural model of a count travel cost model of recreational angling demand and angling success by modeling the two equations jointly we avoid the difficulties associated with the usual approach which estimates the demand for recreational fishing sites assuming the existence of an exogenous measure of fishing quality our analysis explicitly develops the joint log likelihood function that combines the two processes we estimate our model using full information maximum likelihood methods

is the well being of children converging in the european union recent discussion of convergence in the european union has focused on macroeconomic indicators in line with requirements for participation in the single currency but it is reduction of disparities in living standards that is an ultimate goal of european integration the greater economic and social cohesion emphasised by the treaty on union we assemble evidence on whether the well being of children in member states has been converging over the last two decades taking a variety of indicators poverty household worklessness youth unemployment child mortality youth suicide educational enrolment teenage fertility and self reported life satisfaction

cross section estimation of us demand for alcoholic beverage a flexible limited dependent variable model is used to examine us demand for alcoholic beverage parameterization and distributional assumptions of the double hurdle model cragg 1971 and tobit model tobin 1958 are rejected findings suggest that price income household composition and other characteristics have significant effects on alcohol consumption income and own price elasticities are significant but relatively small

on bias correction in the multivariate sample selection model heien and wessells two step estimator for the multivariate sample selection model has been used extensively during the past 15 years a modified version of it with slightly different selectivity regressors has also appeared in the empirical literature both estimators are unfounded and generally do not correct for the sample selectivity bias as intended but have continued to gain popularity in empirical applications the properties of the modified heien wessells procedure are investigated in both the bivariate and multivariate contexts and the conditions under which this estimator fails to correct for sample selectivity are examined the theoretical properties are demonstrated with a simulated random sample

food demand in mexico an application of the amemiya tobin approach to the estimation of a censored food system the modeling of micro level food demand patterns requires not only allowing for household heterogeneity but also addressing the problem of censoring in this article we present a variation of the amemiya tobin framework for estimating a censored demand system that allows for household heterogeneity the unique aspect of our approach is the use of a procedure that ensures the adding up of both latent and observed expenditure shares and also imposes expenditure share nonnegativity this system is applied to an analysis of food demand based on a random sample of urban mexican households

production cost minimization versus consumer payment minimization in electricity pools algorithms that involve some kind of optimization have been adopted by several electricity pools as a tool to clear the market traditionally this kind of models were used on a cost minimizing basis but recent papers have pointed out that alternative dispatches may be obtained that even with higher production costs result in lower electricity prices for consumers this paper studies this new payment minimization approach including the long term economic signals that it provides and their impact on future investments the authors results show that minimizing consumer payment results in discriminatory scheduling for certain generation resources and may cause in the long run higher prices for consumers

improving environmental valuation estimates through consistent use of revealed and stated preference information abstract environmental valuation data from stated and revealed preference methods are integrated into a unified model of preferences for environmental quality improvement that identifies the use and nonuse components of the total value estimate this articulates clearly what parts of the total value estimate come from each type of data and permits tests of whether estimated preferences satisfy weak complementarity between the environmental good of interest and related private goods the statistical advantages of using more information for the valuation problem are exploited while retaining flexibility to identify value estimates from any individual method of analysis

combining revealed preference data with stated preference data a latent class approach a substantial literature exists combining data from revealed preference rp and stated preference sp sources aimed either at testing for the convergent validity of the two approaches used in nonmarket valuation or as a means of drawing on their relative strengths to improve the ultimate estimates of value in doing so it is assumed that convergence of the two elicitation approaches is an all or nothing proposition i e the rp and sp data are either consistent with each other or they are not the purpose of this paper is to propose an alternative framework that allows for possible divergence among individuals in terms the consistency between their rp and sp responses in particular we suggest the use of a latent class approach to segment the population into two groups the first group has rp and sp responses that are internally consistent while the remaining group exhibits some form of inconsistent preferences an em algorithm is employed in an empirical application that draws on the alberta and saskatchewan moose hunting data sets used in earlier combined rp and sp exercises the empirical results suggest that somewhere between one third and one half the sample exhibits consistent preferences we also examine differences in welfare estimates drawn from the two classes

the necessity for substitute prices recreation demand analyses omitting substitute prices from a travel cost model is shown to cause a significant bias in consumer surplus estimates three sets of travel cost models are developed from a common data base representing 60 000 day users of u s army corps of engineer reservoirs in kansas and missouri the firzt set of models omitted substitute prices the latter two sets included them an analysis of variance test showed that consumer surplus estimates from the first set of models were significantly higher than the other two f 26 2 with 2 20 degrees of freedom the theoretical and practical implications of these findings are discussed economic theory postulates that the demand for a good is a function of its price the price of related goods and services and income still many empirical estimates of demand for recreation sites have ignored the price of substitute recreation sites the most common technique for estimating recreational demand is the travel cost model tcm a comprehensive literature review of the tcm conducted by dwyer kelly and bowes showed that only six of twenty clearly defined tcm demand functions included substitute prices as an argument in the demand function most of the models they reviewed were old but considerable debate remains about incorporating substitutes in the tcm consider the diversity of approaches that have recently been used to incorporate substitute prices into tcm demand functions when modeling recreation demand at corps of engineer reservoirs desvousges smith and mcgivney omitted any

working wives and food away from home the box cox double hurdle model household expenditures on food away from home are analyzed with the use of the bls 1989 consumer expenditure survey parameterization and distributional assumptions of cragg s double hurdle model are generalized for this purpose and the resulting model outperforms the more traditional ones results suggest households with working wives and those with higher income are more likely to consume food away from home and also to consume more than others wife s age and household size increase the conditional level of consumption education has conflicting effects on probability and conditional level of consumption

coordination in markets with nonconvexities as a mathematical program with equilibrium constraints part ii case studies this paper is the second of a two paper series it is concerned with the numerical study of the solution procedure derived in to solve the coordination problem that arises in a new equilibrium model which for the purpose of this presentation applies to a static no time coupling costs or constraints electricity pool market with price inelastic demand and no network the new equilibrium model has the following main properties i every scheduled generator satisfies its minimum surplus or bid profit condition ii the energy price is a system marginal cost a lagrange multiplier associated with the power balance constraint in the related economic dispatch problem where all of the discrete variables are fixed to their optimal values iii the power balance and all of the generators technical constraints are satisfied we present some numerical results based on three test systems a simple three generating unit system that can be solved by hand a 32 generating unit system that consists of piecewise linear offer curves and a large system of 768 generating units with monotone and nonmonotone piecewise linear offer curves some of which are set as must run units the results demonstrate that the proposed procedure is more efficient than a heuristic approach both in terms of solution quality and computational efficiency

household demand for fats and oils two step estimation of a censored demand system a censored system of household fat and oil demand equations is estimated with a two step procedure using cross sectional data from the 1987 1988 us nationwide food consumption survey own price and total expenditure elasticities are close to unity and there is no evidence of gross substitutability compensated elasticities suggest net substitution among the products considered

estimating social welfare using count data models an application to long run recreation demand under conditions of endogenous stratification and truncation this paper develops a negative binomial model of recreation demand that corrects for both truncation and endogenous stratification this approach recovers the demand associated with the general population not just the users of the site this model demonstrates the importance of the joint nature of the population s latent demand for trips and the consumer surplus associated with those trips the empirical results provide an estimate of the willingness to pay by washington state residents for hiking opportunities in the cascade mountain range these results are used to forecast total trips and willingness to pay over the next forty years copyright 1995 by mit press

hedonic onsight cost model of recreation demand for many recreational activities onsite pecuniary costs can be a significant portion of the cost of a recreational trip onsite expenditures however often depend upon endogenous quality choices made by the household we formulate a recreation demand model that formally accounts for household selection of quality of onsite time household behavior is constrained by income prices and the onsite hedonic price schedule assuming complete optimization a reduced form marshallian demand curve for recreation trips still results and a specialized version of roy s identity provides a basis for welfare analysis instrumenting for endogenous quality choices does not improve demand estimation

compensating variation consumer s surplus and welfare the compensating variation was defined by j r hicks 1942 as the amount one would have to deduct from a person s income to make him just as well off after a change in prices and income as he had been in the initial situation if the compensating variation is positive the individual is better off under the new situation since the compensating variation furnishes a uniquely defined numerical cardinal indicator of welfare improvement it provides an implicit ranking of alternative prospective situations not only relative to the initial situation but also relative to each other in practice this appears to be how this and other tools of cost benefit analysis are actually used one is interested in knowing not only whether a particular bridge or a particular excise tax will lead to an improvement in welfare but which out of a set of alternative bridges or alternative tax systems will improve welfare the most 1 in this paper we analyze conditions under which the compensating variation can be validly used in this generalized sense these turn out to be precisely the same as conditions previously derived see our 1976 paper for the valid use of consumer s surplus as a welfare measure in our final section we analyze the problem of deriving the generalized equivalent and compensating variations either exactly or approximately from observable demand functions by means of generalizations of or alternatives to consumer s surplus

coordination in markets with nonconvexities as a mathematical program with equilibrium constraints part i a solution procedure this paper is concerned with developing an algorithm for solving the coordination problem that arises in a new equilibrium model which for the purpose of this presentation applies to a static no time coupling costs or constraints electricity pool market with price inelastic demand and no network the new equilibrium model has the following main properties i every scheduled generator satisfies its minimum surplus or bid profit condition ii the energy price is a system marginal cost lagrange multiplier associated with the power balance constraint in the related economic dispatch problem where all of the discrete variables are fixed to their optimal values iii the power balance and all the generators technical constraints are satisfied to solve the coordination problem which is a subproblem of the new equilibrium model it is mathematically convenient to cast the former as a three level nested optimization problem we substitute the ensuing lower level subproblems with an equivalent set of explicit algebraic equalities and inequalities hence we obtain a one level problem which is a discrete continuous mathematical program with complementarity or equilibrium constraints mpec finally we transform the one level mathematical program into mixed integer linear form by substitution of the complementarity terms and the remaining nonlinear terms

augmenting travel cost models with contingent behavior data this paper proposes contingent behavior survey questions as a valuable supplement to observed data in travel cost models of non market demand for recreational resources a set of observed and contingent behavior results for each survey respondent allows the researcher to control for individual heterogeneity by taking advantage of panel data methods when exploring the nature of respondent demands the contingent scenarios also provide opportunities to a test for differences between observed and contingent preferences and or b assess likely demands under conditionsbeyond the domain of observed variation in costs or resource attributes most importantly contingent scenarios allow the researcher to imposeexogenously varying travel costs exogenous imposition of travel costs together with panel methods reduces the omitted variables bias that plagues observed data travel cost models of recreational demand using a convenience sample of data for illustrative purposes we show how to estimate the demand for recreational angling by combining observed and contingent behavior data we begin with simple naive pooled poisson models and progress to more theoretically appropriate fixed effects panel poisson specifications

count data models and the problem of zeros in recreation demand analysis in this paper we develop a count data model for consumer demand which explicitly allows for a large number of zero observations for the dependent variable and separation of the participation versus quantity decisions the advantages of the model over traditional censored and count demand models are brought out and the appropriate consumer surplus measures are derived by introducing a random error term into the traditional count model demand function the appropriate measure of expected consumer surplus for count models is derived the model is illustrated using a recreational survey of the general population

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

on the solution of revenue and network constrained day ahead market clearing under marginal pricing part i an exact bilevel programming approach the first of this two paper series addresses a practical day ahead auction model where generation revenue constraints are explicitly incorporated in the problem formulation as routinely done in several national electricity markets across europe the revenue constrained market clearing procedure includes the effect of the transmission network inter temporal constraints associated with generation scheduling demand side bidding and marginal pricing this auction design is an instance of price based market clearing which features two major complicating factors first locational marginal prices become decision variables of the optimization process in addition producer revenues are formulated as bilinear and highly nonconvex products of power outputs and market clearing prices the resulting problem is formulated as a mixed integer nonlinear bilevel program with bilinear terms for which available solution techniques rely on heuristics approximations or modeling simplifications this paper presents a novel and exact methodology whereby the original problem is recast as an equivalent single level mixed integer linear program as a consequence finite convergence to optimality is guaranteed and the use of standard commercial software is allowed the proposed transformation is based on duality theory of linear programming karush kuhn tucker optimality conditions and integer algebra results in the second part of this two paper series numerical results from several case studies illustrate the effective performance of the proposed solution approach

regional factor price convergence across four major european countries w ebber d j and w hite p 2003 regional factor price convergence across four major european countries reg studies 37 773 782 neo classical growth models predict that the free movement of goods and factors will result in the spatial convergence of output and an ensuing convergence of factor prices based on distribution free statistics this paper presents an empirical examination of average factor prices for labour across 58 regions of the eu over the period 1980 94 using methods of concordance and discordance that identify the presence of switching persistence stratification and convergence between individual and groups of regions our results suggest swings in the trend between factor price convergence and factor price divergence while switching persistence and stratification characterize the sample s evolution w ebber d j et w hite p 2003 la convergence re gionale des prix des facteurs a travers quatre grands pays europeens reg studies 37 773 782 les modeles de croissance neo

endogenously chosen travel costs and the travel cost model an application to mountain biking at moab utah the travel cost model is frequently used to estimate net willingness to pay for recreation at remote sites by using the visitor s travel costs as a proxy for the price of recreation however some concern has been raised over the validity of using the visitor s stated travel costs as a proxy for price this paper addresses some of these concerns by examining the possible over estimation of consumer surplus due to endogenously chosen travel costs this paper extends past theoretical work for the linear model by developing a correction for endogenously chosen travel costs in more commonly used nonlinear models such as the poisson or count data model also provided is the first empirical test of the presence of endogeneity and an estimate of the magnitude of the error from ignoring endogeneity in travel costs after applying this test and the correction to data that was gathered for mountain biking at moab utah the estimate of consumer surplus falls from us 153 to us 135 which is a 12 reduction

coupon redemption and its effect on household cheese purchases by endogenizing unit value and coupon redemption we estimate u s household cheese purchase quality choice and coupon redemption equations simultaneously zero purchases and missing values on coupons and unit values are taken into account in the model to correct for selectivity bias correlations among the three equations are found to be significant empirical findings show that high quality choice significantly decreases cheese purchases while cheese coupon usage significantly increases purchases we find that higher income households select higher quality cheese while larger households choose lower quality cheese for coupon redemption we find that african american and hispanic households redeem less while asian households have no significant difference compared to caucasian households

estimation and welfare calculations in a generalized corner solution model with an application to recreation demand the kuhn tucker model of wales and woodland 1983 provides a utility theoretic framework for estimating preferences over commodities for which individuals choose not to consume one or more of the goods due to the complexity of the model however there have been few applications in the literature and little attention has been paid to the problems of welfare analysis within the kuhn tucker framework this paper provides an application of the model to the problem of recreation demand in addition we develop and apply a methodology for estimating compensating variation relying on monte carlo integration to derive expected welfare changes

electricity market near equilibrium under locational marginal pricing and minimum profit conditions this paper provides a tool to determine the near equilibrium of an electric energy market this market works under locational marginal pricing i e generating units and demand loads are paid and pay respectively the locational marginal prices corresponding to the nodes they are connected to the near equilibrium is defined as the energy transaction levels for which generating companies maximize their respective profits and consumption companies maximize their respective utilities an independent system operator clears the market maximizing the social welfare conditions that ensure minimum profit for generating units can be included however these conditions may render a generating unit uncompetitive and expel it from the market demands are taken to be non constant and values are determined as part of the solution the near equilibrium is obtained through the solution of a mixed integer quadratic problem equivalent to a mixed linear complementarity problem that includes the minimum profit conditions it is important to note that the near equilibrium concept presented in this paper does not solve a market equilibrium when indivisibilities such as start up costs or the like are present lastly we validate the proposed model on a case study using data from the ieee reliability test system

the economics of fish consumption advisories insights from revealed and stated preference data measuring how fish consumption advisories affect angler s utility has proven difficult relying on stated preference sp data is problematic because of hypothetical bias revealed preference rp data benefits from using actual behavior however co linearity often makes it difficult to model the array of advisory severity levels across different species and catch rates the array of advisories also makes traditional joint estimation impractical this paper describes an alternative joint estimation technique based on an index of sp parameter that we used for estimating the effect of fish consumption advisories on the fox river green bay

are stated preferences good predictors of market behavior using an economic experiment in conjunction with a survey we analyze whether consumers hypothetical willingness to pay responses are effective predictors of actual market behavior we model revealed preferences as a function of socio demographic characteristics and instrumental variables that represent the intensity of stated preferences our findings show that consumers who state that they are willing to pay a premium which is equal to or greater than a positive lower bound have a higher likelihood of actually buying the product in question this implies that consumers actions in the economic experiment validate their survey responses

economic and social convergence in colombia royuela v and garcia g a economic and social convergence in colombia regional studies gross domestic product gdp has usually been used as a proxy for human well being nevertheless other social aspects should also be considered such as life expectancy infant mortality educational enrolment and crime issues this paper investigates economic and social convergence between regions in colombia in the period 1975 2005 the main results confirm that there is convergence in colombia in key social variables although not in the classic economic variable gdp per capita it is also found that spatial autocorrelation reinforces convergence processes through deepening market and social factors while isolation condemns regions to non convergence

consumer payment minimization in power pool auctions this paper presents a new methodology within the framework of centralized optimization for calculating optimal generation schedules that minimize energy payments by power pool consumers this paper addresses issues related to market structure and the operation of power pools such as bid evaluation generator no load and start up cost recovery generator unit operating constraints and market clearing price determination unlike conventional unit commitment algorithms that minimize total energy production costs the method presented here minimizes payments by power pool consumers a payment minimization objective leads to a different unit commitment and dispatch solution and lower market clearing prices additionally optimal allocation of generator no load and start up costs over the scheduling period is integrated in the bid evaluation process leading to a further reduction in consumer payments

using count data models in travel cost analysis with aggregate data estimators of recreational demand models frequently use continuous functional forms such as ordinary least squares ols on log transformed variables e g ziemer musser and hill however the nature of trip demand introduces complicating factors first trips occur in nonnegative quantities failure to control for this censoring will lead to biased estimation second because trips are available only in integer quantities the usual demand models which correlate marginal quantity with marginal price may be inapplicable in light of these factors a natural alternative is to use statistical models that explicitly recognize the count nature of trip demand several recent papers e g shaw smith grogger and carson creel and loomis have applied count models to the travel cost model these works largely have focused on truncated data sets based on choice based samples in this study the focus is on the older problem where zero demanders are included in particular the application of several robust estimators of count models to aggregated data will be considered the poisson distribution forms the foundation for the count models examined in this study although the poisson is a convenient distribution to work with it imposes some stringent constraints on the demand distribution in particular the poisson distribution assumes the variance of trip demand is equal to the expected value of trip demand to loosen these constraints a generalization of the poisson the negative binomial is discussed robust estimation procedures that permit further loosening of a priori assumptions are then reviewed permit data from the boundary waters canoe area are used to examine the effects of these count models on consumer surplus estimates and on coefficient variability

strategic offering and equilibrium in coupled gas and electricity markets the wide integration of gas fired units and implementation of power to gas technologies bring increasing interdependence among the natural gas and electricity infrastructures this paper studies the equilibrium of the coupled gas and electricity markets which is driven by the strategic offering behaviors each producer endeavours to maximize its own profit by taking the market clearing process into consideration the market equilibrium can be obtained from an equilibrium problem with equilibrium constraints a special diagonalization algorithm is devised in which the unilateral equilibrium of the gas or electricity market is found in the inner loop given the rivals strategies the interactions of the two markets are tackled in the outer loop case studies on two test systems validate the proposed methodology

on measuring existence value the prevailing consensus that existence value can only be measured by contingent valuation is questioned the concern is over pure existence value a change in welfare when a public good changes that leaves no trace in behavior pure existence value may well be more a consequence of the simple models used to characterize nonuse value than a reflection of how people value public goods if so nonuse value can in principle be obtained from observing behavior as well as from asking questions which offers a prospect for cross checks and corroboration using both approaches some possibilities for empirical measurement are suggested

a welfare estimation of beach recreation with aggregate data a single site travel cost recreation demand model for a representative agent visiting a beach is employed that uses an indirect utility function alternative specifications of the expected demand function are estimated with aggregate time series data from a local beach park the estimated parameters are used to compute the value of the consumer surplus the recreational value of the park is expectedly sensitive to the functional form used also own price and income elasticities for various functional forms vary the results from the box cox procedure suggest that the semi log function is the most appropriate for the data used in this study confidence intervals are calculated to deal with the reliability problem of the consumer surplus estimates an alternative algorithm which assumes omitted variable as the source of the error in the demand function is also presented

on the aggregate value of recreational activities a nested price index approach using poisson demand systems an important consideration in the development ofregulations and policies that administer naturalresources in an area is the value of the non marketactivities supported by those lands little attentionhas been paid to the aggregate value of largegeographic areas this analysis builds autility theoretic price index and utilizes this indexto estimate an aggregate poisson demand to valuebackcountry recreational hiking opportunities innorthern california

a difficulty with the travel cost method instead of observable prices of recreational visits travel cost method tcm re searchers are obliged to substitute researcher assigned visitation cost estimates i argue that visitation costs are inherently subjective but are ordinally measurable so long as the cost in creases with distance travelled it follows that traditional tcm yields only ordinally measur able welfare estimates the household produc tion function formulation of tcm resolves this problem only by imposing severe and un testable analytical restrictions tcm cannot serve as a stand alone technique for estimating recreation benefits rather it must be calibrated using information generated with fundamentally different methods jel q26

estimation of a two level demand system with limited dependent variables a two level demand model was derived from a strongly separable conditional indirect utility function to analyze dominican rural and urban household consumption at different income levels for samples with significant zero consumption a multivariate limited dependent variable model utilizing the concept of virtual prices was used to obtain consistent estimates of consumption parameters results show that households with higher incomes tend to be less responsive to own price and income changes in consumption of most food and nonfood commodities for demographic variates the elasticities of rice and aggregate food with respect to household composition variables are all positive with few exceptions price and income responses of household food and nonfood consumption have significant policy importance this study provides insights into the consumption behavior of rural and urban dominican households within the framework of a complete demand system three basic groups of determinants of household consumption are explored commodity prices household total expenditure and demographic variables our treatment of these fundamental issues involves the application to demand analysis of a a classical theoretical result about commodity decentralization and price aggregation and b an econometric technique to deal with limited dependent variables in the demand system framework the analysis of detailed commodities is often prohibitive because increasing the size of the demand system substantially increases the number of unknown parameters to estimate a relatively large number of parameters in this study the theoretical implications of twostage budgeting and perfect price aggregation are used to construct a two level demand model that is consistent with constrained util

strategic bidding under uncertainty a binary expansion approach this work presents a binary expansion be solution approach to the problem of strategic bidding under uncertainty in short term electricity markets the be scheme is used to transform the products of variables in the nonlinear bidding problem into a mixed integer linear programming formulation which can be solved by commercially available computational systems the be scheme is applicable to pure price pure quantity or joint price quantity bidding models it is also possible to represent transmission networks uncertainties scenarios for price quantity plant availability and load financial instruments capacity reinforcement decisions and unit commitment the application of the methodology is illustrated in case studies with configurations derived from the 80 gw brazilian system

unit commitment with dual variable constraints a new unit commitment model is proposed for market economies with some form of indivisibilities nonconvexities coordination in electricity pool auction markets with unit commitment is a conspicuous example this presentation applies to a single time period unit commitment with no network the new formulation includes a market coordinator who collects the sale and purchase bids and determines the optimal solution that balances the total generation with the forecast demand a solution to the new commitment model is said to be optimal if it maximizes the monetary margin of every accepted production unit while minimizing the sum of the margins of the unaccepted units that would achieve positive margins at the prevailing market price the new unit commitment model produces a market price that is the system wide marginal bid cost some preliminary results are reported considering the single period unit commitment problem which provide some insights into the adequacy of the proposed approach as well as its economic implications as a tool for managing restructured energy systems

a censored system of cigarette and alcohol consumption many previous studies of us cigarette and alcohol consumption have focused on single equations however the addictive nature of consumption suggests that it is more appropriate to model these products as a system we propose a two step estimation procedure and apply the procedure to a system of equations for cigarette beer and wine consumption results differ from those derived from an existing two step procedure findings suggest that consumption of cigarettes beer and wine is responsive to income changes but the elasticities are rather small personal physiques education age race ethnicity health gender employment status and regions also play significant roles in consumption

an analysis of joint costs in a managed forest ecosystem abstract this paper analyzes the tenability of line item budgeting and independently determined output costs for a managed forest ecosystem the general problem of cost allocation in a joint production system is discussed as one of choosing paths of integration a production structure is hypothesized for describing a managed forest ecosystem and its characteristics of jointness are discussed finally an empirical case example is presented which indicates that cost estimates and associated means of production which result from single output costing procedures and from joint costing procedures may be significantly different in a managed forest ecosystem

intra regional amenities wages and home prices the role of forests in the southwest forests provide non market goods and services that people are implicitly willing to pay for through hedonic housing and labor markets but it is unclear if compensating differentials arise in these markets at the regional level this empirical question is addressed in a study of arizona and new mexico hedonicregressionsofhousingpricesandwagesusing census and geographic data show that forest area carries an implicit price of between 27 and 36 per square mile annually compensating differentials at the regional level suggest that care must be taken when applying the travel cost method to value regionallydelineated characteristics jel q23 r14

reconciling social welfare agent profits and consumer payments in electricity pools under a common condition called profit suboptimality market equilibrium cannot be reached in electricity pools in other words no system marginal price exists for which the profit driven independent generators would self schedule to levels that exactly meet the demand on the other hand although a centrally imposed generation schedule satisfies power balance it may force some agents to operate at a profit below what they could achieve under self scheduling this paper examines these incompatible goals and proposes a conflict resolution scheme based on the notion of generalized uplift functions these functions are defined such that they i change the offered generation cost characteristics so as to increase the system marginal price thus forcing the consumers to compensate the generators for part of their combined loss of profit ii execute an equitable transfer of revenues among the generators so that these also participate in any loss of profit compensation iii ensure market equilibrium at the centralized minimum cost solution and iv ensure that the net sum of the uplifts adds up to zero

spatial preference heterogeneity in forest recreation abstract in this study we analyze the preferences for recreational use of forests in lorraine northeastern france applying stated preference data our approach allows us to estimate individual specific preferences for recreational use of different forest types these estimates are used in a second stage of the analysis where we test whether preferences depend on access to recreation sites we find that there is significant preference heterogeneity with respect to most forest attributes the spatial analysis shows that preferences for forests with parking and picnic facilities are correlated with having access to such forests while for the other attributes considered dominant tree species trekking paths and presence of lake and rivers we find no correlation between stated preferences and accessibility this implies that the problem of endogenous distances in the travel cost method parsons 1991 may be present in the estimation of welfare economic values for parking and picnic facilities in the analyzed model the results underline the importance of considering spatial heterogeneity of preferences carrying out economic valuation of spatial delineated environmental goods and that the spatial variation in willingness to pay for such goods is not only explained by the users transport costs of accessing the sites