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

why are informal loans still a big deal evidence from north east thailand abstractthis article examines the use and benefit of informal loans for different income groups of rural households in north east thailand using a difference in differences estimation approach which is later complemented by propensity score matching the article shows that different household groups profit from informal loans in different ways poor households increase their asset endowment and in particular farming assets whereas rich households food consumption rises especially if households borrow due to a shock by showing that informal loans serve different households for different purposes this article provides an explanation why they still play an important role

formal and informal credit markets in egypt this paper examines empirically the markets for formal and informal credit in egypt using a dataset specifically collected for the purpose it examines what factors determine whether or not a person borrows from the informal sector using a probit analysis the paper then conducts a similar exercise for the informal financial sector and seeks to examine whether any link between borrowing in the formal and the informal financial sectors exists conclusions are then drawn as to the role of informal financial markets in the development process this abstract was borrowed from another version of this item

divergence in alternative hicksian welfare measures the case of revealed preference for public amenities this paper investigates the divergence between the two hicksian welfare measures of non traded amenity improvement associated with housing first the hicksian surplus measures for amenity changes are analytically developed based on explicit specification of utility structures a hedonic two stage approach is then applied to empirically show that for quantity changes in contrast to hypothetical markets divergence in real market is small the paper also analytically develops expressions for the income and substitution effects and empirically shows that for a given income effect the greater the substitution effect the smaller the divergence between the two measures copyright 2002 john wiley sons ltd

interarea cost of living measurement with nonmarket goods a demand systems approach abstract this paper examines the importance of controlling for nonmarket good levels in the construction of cost of living indexes based on the parameters of a nonlinear demand system the quadratic expenditure system it uses data from the 1972 1973 survey of consumer expenditures for the four market good expenditure system and includes four nonmarket goods as translating variables it finds that market based indexes and their laspeyres type bounds should be constructed conditionally on nonmarket good levels however the errors incurred by ignoring nonmarket goods i e constructing a partial market based index as if it were a conditional index are generally small indexes constructed unconditionally on the other hand vary dramatically from the conditional ones at both the intercity and intrametropolitan levels

housing submarkets and the lattice of substitution this paper aims to stimulate interest in the early micro economic conceptualisation of housing submarkets proposed by rapkin and grigsby which defined market areas in terms of dwelling substitutability three key questions need to be addressed if a return to the rapkin grigsby approach is to be achievable and worthwhile first what are the practical benefits the paper highlights a range of potential research applications that would benefit from the substitutability approach secondly in what way are existing approaches likely to be inadequate for demarcating substitutability based submarkets four criteria are proposed for assessing submarket estimation methods which existing approaches fail to satisfy thirdly what are the prospects for developing a substitutability metric that will make the rapkin grigsby definition empirically feasible a new measure is proposed based on the cross price elasticity of price cpep which is illustrated using data for glasgow scotland

the estimation of demand parameters in hedonic price models this paper shows that the econometric problem of estimating hedonic demand parameters is not a standard identification problem caused by demand supply interaction as has been often assumed estimation procedures based on this assumption lead to biased results the hedonic estimation problem is instead caused by the endogeneity of both prices and quantities when households face a nonlinear budget constraint an instrumental variables solution to this problem is suggested using instruments that exogenously shift the budget constraint

compensating differentials in emerging labor and housing markets estimates of quality of life in russian cities abstract the purpose of this paper is to see if an equilibrium model of compensating differences for amenities can be applied to a major transition economy russia we analyze russian labor and housing markets using data from the russian longitudinal monitoring survey rlms augmented by city and regional specific characteristics from other sources our estimated wage and housing value equations suggest that workers are compensated for differences in climate environmental conditions ethnic conflicts crime rates and health conditions after controlling for worker characteristics occupation industry and economic conditions and various housing characteristics we find evidence that these compensating differentials exist even after controlling for the regional pay differences regional coefficients used by the russian government to compensate public sector workers for living in regions that are designated as less desirable quality of life as measured by a group of eleven amenities varies substantially the highest ranked cities tend to be in relatively warm areas and areas in the western european part of the country our quality of life index is positively correlated with net migration into a region suggesting workers are attracted to amenity rich locations overall we find that a model of compensating differentials with controls for disequilibrium yields useful information about compensation for location specific amenities and quality of life in this large transition economy

do village funds improve access to finance evidence from thailand summary this paper examines whether recently introduced village funds one of the largest microfinance programs ever implemented improve access to finance village funds are analyzed in a cross sectional approach in comparison to competing financial institutions we find first that they reach the target group of lower income households better than formal financial institutions second village funds provide loans to those kinds of borrowers who tend to be customers of informal financial institutions third village funds help to reduce credit constraints thus village funds provide services in the intended direction albeit to a seemingly limited degree

the determinants of credit access and its impacts on micro and small enterprises the case of garment producers in kenya abstract there are diverse sources of credit for micro and small manufacturing enterprises mses in developing countries ranging from relatives and friends rotating savings and credit associations roscas micro finance institutions and commercial banks using a unique set of data on mses in garment clusters in nairobi this study attempts to identify the determinants of access to different credit sources and their impacts on firm profitability and growth the results of the regression analysis demonstrate that factors determining access to credit are often different from those affecting enterprise performance indicating limited impacts of credit access on enterprise performance

identifying hedonic models economic models for hedonic markets characterize the pricing of bundles of attributes and the demand and supply of these attributes under different assumptions about market structure preferences and technology see jan tinbergen 1956 sherwin rosen 1974 and dennis epple 1987 for contributions to this literature while the theory is well formulated and delivers some elegant analytical results the empirical content of the model is under debate it is widely believed that hedonic models fit in a single market are fundamentally underidentified and that any empirical content obtained from them is a consequence of arbitrary functional form assumptions the problem of identification in hedonic models is a prototype for the identification problem in a variety of economic models in which agents sort on unobservable to the economist characteristics models of monopoly pricing michael mussa and sherwin rosen 1978 robert wilson 1993 and models for taxes and labor supply james heckman 1974 sorting is an essential feature of econometric models of social interactions see william brock and steven durlauf 2001 in this paper we address the sorting problem in hedonic models nesheim 2001 extends this analysis to a model with peer effects in this paper we note that commonly used linearization strategies made to simplify estimation and justify the application of instrumental variables methods produce identification problems the hedonic model is generically nonlinear it is the linearization of a fundamentally nonlinear model that produces the form of the identification problem that dominates discussion in the applied literature linearity is an arbitrary and misleading functional form when applied to empirical hedonic models our research establishes that even though sorting equilibrium in a single market implies no exclusion restrictions the hedonic model is generically nonparametrically identified instrumental variables and transformation model methods identify economically relevant parameters even 1 without exclusion restrictions multimarket data widely viewed as the most powerful source of identification achieves this result only under implausible assumptions about why hedonic functions vary across markets

schools and housing markets an examination of school segregation and performance in connecticut this paper estimates a dynamic model of price level school performance and school racial and ethnic composition in the state of connecticut the paper finds that increasing minority representation in a labor market area reinforces the existing pattern of school segregation changes in segregation appear to be influenced by demographic trends in urban areas and by the labour market factors that determine those trends there is no evidence however to suggest that this process affects housing prices rather the housing market appears to adjust relatively quickly

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

the welfare economics of land use planning abstract this paper presents an empirical methodology for the evaluation of the benefits and costs of land use planning the technique is applied in the context of the town and country planning system of the uk and examines the gross and net benefits of land use regulation and their distribution across income groups the results show that the welfare and distributional impacts can be large

the two stage hedonic wage approach a methodology for the valuation of environmental amenities abstract this paper extends the hedonic wage model to a two stage model in which willingness to pay may be estimated for specific amenities in concert with supply relationships which may be estimated independent of the hedonic model these willingness to pay functions allow for the computation of the value of changes in the level of the amenity the technique has several important advantages over other valuation techniques including less stringent data requirements and fewer econometric problems such as intractable identification problems and truncation biases the model is applied to freshwater fishing and benefits associated with changes in fishing quality are estimated both generically and through specific water quality improvements

new estimates of climate demand evidence from location choice abstract we develop and apply to census data a new method for estimating climate demand the method is useful for ranking quality of life based upon a willingness to pay criterion our two major findings are that the willingness to pay quality of life index is correlated with the hedonic approach s ranking but that the migration approach generates much larger estimates of willingness to pay for a more moderate climate this finding is relevant for evaluating the economic impact of global warming

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 choice of functional form for hedonic price functions the empirical results presented in this paper demonstrate the usefulness of quadriatic models in the estimation of hedonic price functions we propose a quadriatic semi log model a restricted case of the quadriatic box cox model whose standardized marginal attribute prices are linear functions of the attribute vector this specification outperforms the linear box cox specification in terms of explanatory power and captures much of the increase in explanatory power provided by the quadriatic box cox model without the corresponding loss in the ability to interpret the coefficient estimates for policy applications the quadriatic semi log model provides a useful alternative to linear specification

flexible consumer demand functions and linear estimation comment in a recent article in this journal swamy and binswanger sb claim that consumer demand equations in real income and relative prices can be obtained directly by differentiating a cost function in which output is replaced by real income the advantage of this approach they maintain is that we can obtain observable demand functions linear in parameters which are integrable into wellbehaved expenditure and indirect utility functions this approach to deriving demand functions however is considerably less general than sb maintain their method of derivation assumes that changes in utility can be approximated by changes in real income changes in utility are proportional to changes in real income for any given price vector but this proportionality factor will change when prices change unless indifference curves are everywhere parallel this latter condition obtains only when the direct utility function is homothetic implying unitary income elasticities throughout this means as a description of the real world sb s method can have only local validity not global validity like roy s identity this also means that the three functional forms proposed by sb are best regarded as statistical demand functions integrable into an arbitrary neoclassical utility function only at some base point sb s method of deriving consumer demand functions is to replace the utility level in the hicksian demand functions by real income they maintain this approach is possible because certain index numbers can be estimated which when used to deflate nominal income provide estimates of changes in real income that correspond exactly to changes in utility levels p 676 the problem with this approach is that in contrast to output in producer theory utility is unobservable thus arbitrary changes in utility cannot be calculated from changes in real income unless we know the parameters of the utility functions this is true regardless of how accurately real income is measured this is equivalent to saying that in general the relationship between changes in utility and changes in real income is not independent of prices to verify this claim consider the total differential of the hicksian demand function xi u p which can be written 1 d log x

a cross section demand analysis of spanish provincial food consumption i follow the differential approach in building three demand models of spanish cross province food consumption patterns the models include quadratic income terms for estimating the widely varying income responses one expects from cross section data the proposed models are also flexible in permitting alternative levels of aggregation across goods a nonnested testing procedure is used to identify the best model both the flexibility of the quadratic income term and the flexibility of alternative aggregation levels are important in the analysis of spanish food consumption patterns

choice among wage hours packages an empirical investigation of male labor supply this article specifies and estimates an empirical model of male labor supply based on an implicit market model of wage hours determination we discuss how moving from a standard labor supply model to an implicit market model affects model specification and choice of estimation technique we find that average hourly earnings are not independent of hours worked and that ols estimates of the wage hours relationship are biased we also show that a labor supply model that assumes wages to be independent of hours worked produces a positively biased estimate of the effect of the wage on labor supply

pensions and wage premia i introduction despite the widespread acceptance of the theory of compensating differences empirical efforts to estimate the magnitude of these differences have met with only mixed success 1 with the exception of fatal risks economists have not been able to consistently find a significant relationship between wages and other job characteristics the failure to find consistent evidence on compensating differentials has been attributed to either poor measures of non wage characteristics or inadequate controls for worker productivity 2 studies by gunderson hyatt and pesando 1992 montgomery shaw and benedict 1992 and moore 1987 which have been able to explicitly address these issues have had greater success in finding significant compensating differentials in this paper we focus on an alternative explanation for the variation in estimated compensating differentials that the magnitude of the compensating differential varies systematically across different sectors in the labor market the theory of compensating differentials predicts that the implicit price or cost of providing a job attribute such as pensions will be a function of firm or industry technological differences and that the value attached to that attribute will also vary across workers depending on their tastes if workers and firms are not randomly assigned to sectors this will lead to systematic variations in the size of the estimated compensating differential across sectors or markets the result of this variation is that studies using different subsamples of the labor force will yield very different estimates of the size of the compensating differential the few studies that have addressed sources of heterogeneity in compensating differentials have concentrated on testing for individual differences in tastes for risk 3 in contrast our emphasis is on firm side differences in technologies or market power we estimate the compensating differential between annual pension accruals and wage rates and let this tradeoff vary by firm size and union status with corrections for selectivity bias the implicit cost of pensions and hence the size of the compensating differential may vary by finn size or union status for a number of reasons greater ability to spread fixed administrative costs across a large work force more difficulty monitoring worker effort or the presence of market power thus the cost of fringe benefits to the firm may be lower in large or unionized firms than in small nonunion firms we find empirical evidence supporting this view the estimated wage pension compensating differentials are smaller in unionized and large firms than in small nonunion firms the results from this paper are significant for several reasons 1 they provide evidence that compensating differentials vary across markets this evidence could account for some of the differences in estimates of tradeoffs across studies that have used different nonrandom samples 4 more importantly these sectoral differences serve as a reminder that the labor market is in fact a multitude of markets and that technological differences that vary across markets should be considered when addressing issues ranging from estimating the returns to human capital investment to the impact of the minimum wage 5 2 these results also deepen our knowledge of the relationship between pensions and wages a relationship that has important implications for the shape of workers wage earnings profiles or for the mechanisms for motivating workers and for the returns to human capital and for the distribution of income regarding the latter pensions are a large component of compensation and work by even and macpherson 1990 mccarthy and turner 1983 and moore 1987 suggests that coverage rates and returns are smaller for women and blacks our analysis suggests that an element of the differences could be sectoral choices

an empirical analysis of the demand for housing attributes in a third world city this paper presents estimates of the demand for a set of housing attributes using data drawn from the renter and owner occupier housing submarkets for ibadan nigeria the empirical analysis based on an adaptation of rosen s two step model reveals that the most important determinants of the demand for housing attributes are income price of the attribute in question household size and the occupational status of the head of household the paper further indicates that the demand for housing attributes is inelastic since all estimated coefficients are below unity

the financial repression liberalization debate taking stock looking for a synthesis financial repression and liberalization became the object of fierce debates between academics and policy makers since the early 1970s as of the late 1980s financial liberalization became also part of the structural adjustment programs sponsored by the international monetary fund and the world bank however the literature on financial repression and liberalization remains controversial on its theoretical conclusions and policy implications given its importance for both the theory and policy of economic development and growth this paper looks for a possible synthesis after reviewing the theoretical contributions and empirical studies under the headings of the mckinnon shaw and new structuralists models the survey concludes that a new synthesis might be found in the post keynesian attempt to take an institutional perspective within a globalised financial and economic environment

a regional analysis of food consumption in spain abstract working s model of the engel curve is applied to food and staple food expenditures with two years spanish provincial data the functional form of working s model is tested against two other specifications and cannot be rejected the estimation results are quite comparable with those obtained by other authors we also find that spain has experienced a substantial change in the pattern of food consumption during the 1970s

simultaneity in the market for housing characteristics abstract the nature of simultaneity in the markets for housing characteristics is examined simultaneity is found to arise in the implicit markets for individual characteristics because of the presence of nonlinearity in the market hedonic price function for housing however this simultaneity is not the kind discussed by s rosen j political econ 82 34 55 1974 between firm supplies and household demands as a result the rosen suggestion of identifying demand with firm supply shifters is inappropriate among the alternative approaches to identification the most desirable involve use of data over two or more markets in which residence for a given household is exogenous to the choice of housing

wage and rent capitalization in the commercial real estate market abstract in this paper we develop three simplified models of the commercial land market within a two center metropolis in each model we focus on how exogenous differences in production costs between centers are capitalized into differences in commercial space rents and wages we show that in a competitive land market wages must account for most of the capitalization as zoning or density regulations limit commercial development at the most advantageous center space rent differences begin capturing more and wage differences less locational value we conclude that the simple application of hedonic theory to the commercial real estate market may be quite misleading

meat meets meta a quantitative review of the price elasticity of meat the price elasticity of meat has been estimated in numerous studies that utilize a variety of disparate modeling procedures in light of differences in the literature a meta analysis is performed to assess the sensitivity of the meat price elasticity to a number of characteristics including the type of meat specification of demand nature of data estimation method characteristics of the publication outlet and location of demand the results from estimating linear and box cox meta regressions coupled with different panel data treatments reveal that these characteristics have differing influence on the reported price elasticity

estimating housing demand with an application to explaining racial segregation in cities we present a three stage nonparametric estimation procedure to recover willingness to pay for housing attributes in the first stage we estimate a nonparametric hedonic home price function in the second stage we recover each consumer s taste parameters for product characteristics using first order conditions for utility maximization finally in the third stage we estimate the distribution of household tastes as a function of household demographics as an application of our methods we compare alternative explanations for why blacks choose to live in center cities while whites suburbanize

risk coping land tenure and land markets an overview of the literature over the last decades a significant amount of literature has been published on informal risk coping in developing countries in this paper we review how informal risk coping has been addressed in the land tenure literature from two main perspectives a first stream of research looks at how customary tenure and communal property perform key informal risk coping functions a second subset of this literature analyses how informal risk coping creates land market imperfections through sharecropping or distress sales the segmentation of the literature results from the demsetzian property rights framework further research on risk coping and land tenure would benefit from examining recent work on property regimes

valuing risk in the workplace market price willingness to pay and the optimal provision of safety the theory of compensating wage differentials attributable to adam smith suggests that jobs with disagreeable characteristics will command high wages ceteris paribus most empirical tests of this theory with hedonic wage equations implicitly assume that workers willingness to pay for risk reduction safety in the workplace through diminished wages and market valuations of the price of these reductions are equivalent it is shown that this is not the case within the manufacturing sector where willingness to pay exceeds the price cost of risk reduction at current levels of risk exposure implications for implied value of life estimates are also examined copyright 1990 by mit press

flexible consumer demand systems and linear estimation food in india demand equations in real income and nominal prices can be obtained directly by differentiating a cost function in which output is replaced by real income this derivation is possible because recent advances show that certain index numbers provide close approximation to real income without knowledge of the utility function parameters three flexible functional forms corresponding to well known flexible cost functions were used to estimate food demand elasticities time series and cross sectional data from ten indian states for twenty years were used the estimates provide a complete set of expenditure price and cross price elasticities for four commodities some close substitutes

hedonic prices and implicit markets estimating demand and supply functions for differentiated products in choosing the level of quality to purchase the buyer of a differentiated product also chooses a point on the marginal price schedule for that product hence in general the demand functions for product characteristics cannot be consistently estimated by ordinary least squares market equilibrium results in a matching of characteristics of demanders and suppliers this matching restricts the use of buyer and seller characteristics as instruments when estimating demand and supply functions for product characteristics the paper develops these issues a stochastic structure for hedonic equilibrium models is then proposed identification results are presented and estimation procedures are outlined

individual travel cost method estimation and benefit assessment with a discrete and possibly grouped dependent variable the trip visit variable in the individual travel cost method is often regarded as discrete furthermore it is often reported in surveys as a grouped variable the number of visits reported falling into one of several classes this paper develops a travel cost model which takes account of discreteness and grouping in both demand and benefit estimation a case study and associated simulations are then reported which indicate the potential extent of bias that may arise from ignoring discreteness grouping in demand and benefit estimation the information loss involved in varying the size of visit classes is also examined

formal and informal rural credit in four provinces of vietnam abstract this paper uses a survey of 932 rural households to uncover how the rural credit market operates in vietnam households obtain credit through formal and informal lenders formal loans are almost entirely for production and asset accumulation while informal loans are used for consumption smoothening the determinants of formal and informal credit demand are distinct while credit rationing depends on education and credit history in particular regional differences in the demand for credit are striking a one size fits all approach to credit policy in vietnam would be inappropriate