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

does it matter how monetary policy is implemented abstract in the u s existing monetary base measures add an adjustment factor for changes in reserve requirement ratios to high powered money implicitly the monetary base assumes that the economic effects of changes in reserve requirements are identical to those due to changes in high powered money theory however does not generally support the prediction that the two policy tools will have the same economic effects structural vars are estimated to compare the short run paths of inflation and output growth under two different types of policy shocks in doing so this analysis gives one a measure of the costs associated with this implicit equivalence assumption the evidence is consistent with the hypothesis that the federal reserve at least partially offsets reserve requirement changes with open market operations and the hypothesis that dynamic explanations of macroeconomic variables are improved by separating reserve requirement changes from other monetary policy moves

financial intermediation reserve requirements and inside money a general equilibrium analysis abstract reserve requirements are examined in a general equilibrium context the paper develops a simple general equilibrium model that includes diverse opportunities for investment and a role for financial intermediaries two versions of the model are considered one is a thought experiment in which currency serves purely to satisfy legal reserve requirements the other is more realistic the model is used to analyze the comparative static effects of changes in reserve requirements the effects of changes in other parameters of the economy in the presence of reserve requirements and some qualitative issues raised by reserve requirements

do better schools matter parental valuation of elementary education the evaluation of numerous school reforms requires an understanding of the value of better schools given the difficulty of calculating the relationship between school quality and student outcomes i turn to another method and use house prices to infer the value parents place on school quality i look within school districts at houses located on attendance district boundaries houses then differ only by the elementary school the child attends i thereby effectively remove the variation in neighborhoods taxes and school spending i find that parents are willing to pay 2 5 percent more for a 5 percent increase in test scores this finding is robust to a number of sensitivity checks

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

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

amenity values versus land constraints the spatial effects of natural landscape features on housing values when local amenities are tied to natural land use features that cannot be developed for physical or regulatory reasons the corresponding implicit price estimates from a hedonic housing model may reflect local supply constraints and confound estimation of natural amenity values using a spatial simultaneous equations model of housing values and migration we examine whether local supply constraints from natural or preserved features have influenced the housing market results indicate that constraints associated with the presence of water bodies and some types of open space preservation have contributed to higher housing prices offsetting local demand for these natural amenities jel c31 r23

dreams of urbanization quantitative case studies on the local impacts of nuclear power facilities using the synthetic control method this paper uses the synthetic control sc method to examine how the establishment of nuclear power facilities npfs in japan in the 1970s and 1980s has affected local per capita income levels in the municipalities in which they were localted npf municipalities eight quantitative case studies using the sc method clarify that the effects of npf establishment on per capita taxable income levels are highly heterogeneous the estimated effects are often economically meaningful and in some cases huge the income level was 11 higher on average and 62 higher in one municipality in 2002 when compared with counterfactual units on the other hand a few of the npf municipalities have received only weak or negligible effects from npf establishment the post estimation comparisons of employment between the npf municipalities and the sc units suggest that the size of the direct labor demand shocks and subsequent indirect employment effects on nontradable service sectors have contributed to the increase in per capita income levels

corporate taxes and the demand for labor and capital in developing countries this article provides evidence about the impact of corporate taxation on both labor and capital demand by private companies in a developing economy using firm level data from chile our results show that higher corporate tax rates reduce not only the demand for capital but also the demand for labor due to complementarities between both inputs an interesting element of the results presented in this article is the asymmetry between the effects of taxation according to company size the impact on labor demand is significantly higher in large corporations than in small enterprises while the demand for capital is more responsive to corporate tax changes in small firms we can explain these results based on differences in credit constraints according to firm size

house values incomes and industrial pollution abstract this paper analyzes the effect of polluting manufacturing facilities on the economic characteristics of nearby neighborhoods it tests the hypothesis that communities exposed to high levels of pollution will have lower house prices and poorer residents than cleaner locations the econometric model treats pollution and income as simultaneously determined variables the multiple equation fixed effects model attempts to account for cross section and time varying biases it uses toxics release inventory tri and census data from the 1980s for the six new england states i employ a new measure of the change in exposure to pollution over the 1980s for census tracts the estimates suggest that being a mile closer to a polluting manufacturing plant reduces house values by 1 9 which is smaller than estimates from existing studies however the equivalent single equation estimate suggests misleadingly that pollution has a positive effect on house values

average derivative estimation of hedonic price models conventional parametric techniques for estimatinghedonic price models require a correct functionalform in this paper we side step this parametricshortcoming by estimating a hedonic price model usingaverage derivative estimation ade thissemiparametric approach produces robust estimates ofthe marginal effects without assuming a specificfunctional form a priori in our application ofthe model to a unique data set on korean home prices ade produced estimates consistent with priorexpectations providing initial evidence that themodel may represent a viable alternative when usingthe hedonic approach

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

the dynamic effects of aggregate demand and supply disturbances we interpret fluctuations in gnp and unemployment as due to two types of disturbances disturbances that have a permanent effect on output and disturbances that do not we interpret the first as supply disturbances the second as demand disturbances demand disturbances have a hump shaped mirror image effect on output and unemployment the effect of supply disturbances on output increases steadily over time peaking after two years and reaching a plateau after five years

directional heterogeneity in distance profiles in hedonic property value models abstract in environmental economics hedonic property value hpv models have often employed distance from a localized environmental disamenity as a proxy for perceived risk the magnitude of a distance effect on housing prices however may depend upon the direction in which it is being measured we generalize conventional distance models to allow for continuously varying directional effects by converting from cartesian to polar coordinates a simple empirical example for housing prices around woburn massachusetts between 1988 and 1996 illustrates how failure to allow for directional heterogeneity can obscure otherwise statistically significant distance effects in hpv

taxation and private investment evidence for chile along with several structural reforms chile embarked upon a major income tax reform in the eighties its basic feature was a significant reduction in the corporate income tax rate the purpose of this article is to investigate empirically the link between the tax reform and the investment performance of chile since the reform macroeconomic and microeconomic evidence is found to be consistent with the hypothesis of the reduction in the corporate income tax as being one of the determinants of the investment boom of the late eighties and nineties in chile our estimations suggest that there are two channels in which taxes affect investment on the one hand higher taxes increase the cost of capital cost of capital channel and on the other they reduce internal funds available for investment liquidity constraint channel

atheoretical macroeconometrics a critique abstract the spurious nature of the restrictions used to identify many macroeconometric models has led some researchers to advocate a style of econometric inquiry that is less dependent on prior theoretical restrictions of the sort that were central to the approach of the cowles commission this development which we call atheoretical macroeconometrics is summarized and evaluated in the current paper it is contrasted with an updated version of the cowles commission approach we conclude that while some of the exercises of atheoretical macroeconometrics are valid those that have attracted the most attention and appear the most innovative exogeneity testing impulse response analysis and policy analysis using estimated vector autoregressions are based on incorrect analysis

on the choice of funtional form for hedonic price functions this study examines how errors in measuring marginal attribute pric es vary with the form of the hedonic price function in simulations consumers with known utility functions bid for houses with given attributes various forms of the hedonic function are estimated using equilibrium housing prices errors in estimating marginal attribute prices are calculated by comparing each consumer s equilibrium marginal bid vector with the gradient of the hedonic function when all attributes are observed linear and quadratic box cox forms produce lowest mean percentage errors however when some attributes are unobserved or are replaced by proxies linear and linear box cox functions perform best copyright 1988 by mit press

retail level hedonics and the valuation of milk components a retail level hedonic model for analyzing the value of milk components contained in aggregate dairy product commodities is developed and applied to household food consumption survey data the findings support perrin s conjecture that a hedonic approach applied at the retail level can be used to value milk components milk component values are found to be a function of household sociodemographic variables the sample weighted average implicit fat value estimate was very similar to values published in two of three previous component value analyses in the journal but protein values were significantly different

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

house prices during siting decision stages the case of an incinerator from rumor through operation abstract the impact of an undesirable land use on house prices is not constant over time previous proximity studies which employed only discrete changes in information such as an epa superfund site announcement ignored potentially important phases of the adjustment process this study explicitly measures how the effects of an undesirable land use evolve over the siting process and life of the disamenity some price response to rumors of a facility is indicated and the evidence that prices respond at groundbreaking before operation is strong the distance premium persists at least 7 years after the facility begins operations

can stigma explain large property value losses the psychology and economics of superfund this research documents the long term impacts of delayed cleanup on property values in communities neighboring prominent superfund sites the research examines the sale prices of nearly 34 000 homes near sites in three metropolitan areas for up to a 30 year period to our knowledge no other property value studies have examined sites in multiple areas with large property value losses over the length of time used here the results are both surprising and inconsistent with most prior work the principal result is that when cleanup is delayed for 10 15 and even up to 20 years the discounted present value of the cleanup is mostly lost a possible explanation for these property value losses is that the sites are stigmatized and the homes in the surrounding communities are shunned the results suggest that expedited cleanup and minimizing the number of stigmatizing events would reduce these losses

taxes and growth in a financially underdeveloped country evidence from the chilean investment boom this paper argues that taxation of retained profits is particularly distortionary in an economy with good growth prospects and poorly developed financial markets because it primarily reduces the investment of financially constrained firms investment that has marginal product greater than the after tax market real interest rate contrarily taxes on distributed profits or capital gains primarily reduce the investment of financially unconstrained firms chile experienced a banking crisis over the period from 1982 to 1986 and in 1984 reduced its tax rate on retained profits from 50 percent to 10 percent we show that consistent with our theory there was a large increase in aggregate investment after the reform which was entirely funded by an increase in retained profits further we show that investment grew by more in industries that depend more on external financing according to the rajan and zingales 1998 measure finally we present some weak evidence from comparisons of investment rates across firms for several different measures of their likelihood of being financially constrained

an interregional hedonic analysis of noxious facility impacts on local wages and property values abstract since the early work of rosen roback and more recently blomquist berger and hoehn economists have recognized that local environmental amenities influence wage rates and property values jointly moreover local differentials in these prices can be used to implicitly value local amenities unfortunately much of the empirical work on noxious facilities has focused on a narrow range of facility types often within a single city generally distance from the facility is used to proxy exposure to the disamenity although it is possible that the mere existence of a noxious facility in a region has an impact on local residents we employ an intercity hedonic model to measure the joint property value and wage effects of a broad range of noxious facilities using public use microdata from the 1980 united states census we show that property values and or wages are significantly influenced by the existence of noxious facilities calculated implicit prices reveal that local residents are most averse to the presence of petrochemical refineries and nuclear power plants

evidence for countercyclical risk aversion an experiment with financial professionals countercyclical risk aversion can explain major puzzles such as the high volatility of asset prices evidence for its existence is however scarce because of the host of factors that simultaneously change during financial cycles we circumvent these problems by priming financial professionals with either a boom or a bust scenario subjects primed with a financial bust were substantially more fearful and risk averse than those primed with a boom suggesting that fear may play an important role in countercyclical risk aversion the mechanism described here is relevant for theory and may explain self reinforcing processes that amplify market dynamics jel e32 e44 g01 g11 g12

hedonic valuation of the perceived risks of nuclear power plants we use the 2011 fukushima accident to evaluate the impact of the perceived risks of nuclear power plants on apartment rents in switzerland using online advertisements over 12 years and a difference in differences approach we find a 2 3 price discount after the accident for apartments near nuclear power plants

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

nuclear power plants and the value of agricultural land entail substantial detrimental consequences to the environment consequently it might be expected that nuclear risks at any plant would be capitalized in the reduction of the value of assets located nearby two studies in the united states however found no consistent significant effects of proximity to a nuclear reactor on the price of local housing nelson 1981 found that no significant reduction in nearby housing prices occurred following the accident at three mile island gamble and downing 1982 investigated the effect of proximity to a nuclear plant on housing sale prices near five sites and found predominantly insignificant effects however unlike the presumption of these studies it may be that the external effects extended to a larger geographic area and differentially affect different assets thus the correlation of individual housing values and distance e g within the 20mile radius examined by gamble and downing may be relatively unimportant at the same time as the interarea effects are substantial the study presented here examines agricultural land values in a cross section of 494 market area regions constituting the united states the hypothesis of a nuclear externality is tested by estimating a reduced form equation of the equilibrium average price of an acre of farmland in which the presence of a reactor is indicated by one or more dummy variables the next section presents the theoretical model and develops the econometric specification next the data are described and then the results are reported a discussion of possible confounding effects including tests of alternative hypotheses is next a conclusion section closes the paper the major finding is that a significant negative externality on the value of agricultural land on a scale meaningful for energy policy is consistent with these empirical analyses

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

distribution of income and toxic emissions in maine united states inequality in two dimensions abstract ecological distribution refers to inequalities in the use of environmental sinks and sources this article explores one such dimension of ecological distribution that of toxic air emissions using data from the risk screening environmental indicators model and the united states census bureau i analyze the distribution of both environmental risk and income at the block group level in the state of maine the state of maine was chosen for its historical dependence upon natural resources as well as its economic and spatial heterogeneity results clearly indicate that the toxic air emissions are distributed much more unequally than is income and that those inequalities are reinforcing while not in itself an indication of environmental injustice such analyses may help us to rethink the assumption that there is a tradeoff between income and pollution

estimating the demand for the characteristics of housing a hstract estimates of the demand for the characteristics contained in a differentiated product such as housing can be based on hedonic regressions however previous studies have not dealt with several potential problems in such estimation a more appropriate framework for the estimation is provided in this paper also data from a number of cities are used to eliminate the identification problem and the endogeneity of the marginal prices derived from non linear hedonic equations is considered in the estimation the results on own and cross price elasticities expenditure elasticities and the effects of socio economic vafiables accord well with expectations

are reserve requirements relevant for economic stabilization abstract the level of the required reserve ratio and the payment of interest on required reserves are irrelevant for economic stability 1 when the central bank appropriately adjusts its interest elasticity of supply of reserves or currency to offset changes in the required reserve ratio or in the interest rate paid on required reserves or 2 when economic agents form their price level expectations rationally conditional on the current interest rate

rail accidents and property values in the era of unconventional energy production abstract we estimate the effect of 33 derailments involving hazardous materials on property values in new york state between 2004 and 2013 difference in differences analyses show that on average a derailment depreciates housing values within a one mile radius by 5 8 the prices of affected properties return to pre accident levels after about 480 days in addition we find that the impacts of derailments on property values are limited to the local area these results provide evidence for evaluating the economic costs of rail transportation to nearby communities and for considering policy options in the current era of u s energy transformation resulting in substantial increases in the rail shipment of fuels

a reconsideration of sims evidence concerning monetarism abstract in var systems such as those of sims 1980 monetary policy surprises may be more accurately represented by interest rate than money stock innovations especially if the monetary authority uses an interest rate instrument

why do most firms die young a model is developed to explain why most firms die in the first few years of trading a risk averse entrepreneur with initial capital endowment faces a brownian motion in net worth over time to balance return profits growth and risk variance of profits she adopts a portfolio strategy choosing market positioning to achieve an optimal combination of risk and return at each instant given her financial and human capital endowments and attitude towards risk failure occurs when the firm s value falls below the opportunity cost of staying in business the resulting distribution of failure is inverse gaussian implying for specific parameter values a positively skewed failure curve of the type observed in practice in addition the model presents a novel measure of management human capital mhc which implies that high mhc entrepreneurs will have higher absolute and marginal profits growth than low mhc entrepreneurs at given levels of risk

valuing public goods a comparison of survey and hedonic approaches although the theory of public goods has progressed rapidly since paul samuelson s seminal article the empirical measurement of the value of demand for public goods only recently has received increased attention perhaps the best known and most widely accepted empirical approach has been the use of hedonic prices wherein for example it is assumed that either wages or housing values reflect spatial variation in public good characteristics of different communities this indirect approach based on theoretical work of charles tiebout kelvin lancaster sherwin rosen and others has proven quite successful among public goods or bads which have been valued using the hedonic approach are climate i hoch air pollution robert anderson and thomas crocker d harrison and d rubinfeld social infrastructure r cummings et al and other community characteristics such as noise level j nelson and ethnic composition ann schnare an alternative approach is to directly ask households or individuals to state their willingness to pay for public goods using survey techniques despite arguments that strategic bias will invalidate survey results there exists the need for an alternative to the hedonic approach as an example consider the case of a remote and unique scenic vista valuable to recreators which is threatened by air pollution from a proposed coal fired plant a typical situation in the western united states although it is possible in principle to impute the value of clean air and visibility from the relative decline in local visitation which might follow construction of a power plant information on the value of visibility at the site is needed prior to construction for socially optimal decision making on plant location and pollution control equipment the hedonic approach is unavailable both because the scarcity of local population as opposed to recreators makes use of wage or property value data impossible and because scenic vistas may themselves be unique for these reasons a randall et al first applied survey methods for valuing visibility and other environmental effects of large coal fired power plants in the four corners region of new mexico since this initial application the survey approach has been widely used to value environmental commodities where market data for hedonic analysis is difficult to acquire see for example brookshire ives and schulze rowe et al brookshire et al other early attempts to value public goods using the survey approach include r davis peter bohm and j hammack and g brown although results of using the survey approach for estimating the value of public goods appear to be internally consistent replicable and consistent with demand theory see schulze et al little work on external validation has been reported thus the purpose of this paper is to report on an experiment designed to validate the survey approach by direct comparison to a hedonic property value study the los angeles metropolitan area was chosen for the experiment because of the well defined air pollution problem and be assistant professor university of wyoming assistant professor university of missouri rolla associate professor university of wyoming and professor university of wyoming respectively the research reported here was funded under a grant methods development for assessing air pollution control benefits from the u s environmental protection agency we would like to give special thanks to alan carlin and shelby gerking for their helpful suggestions and contributions additional helpful comments were received from a myrick freeman iii john tschirhart and james murdoch all conclusions are of course our sole responsibility

reserve requirements and optimal seigniorage abstract this note presents a model of optimizing agents who chose to hold deposits at financial intermediaries which are required to hold fractional reserves of fiat money when the stock of fiat money is expanded the reserve requirement functions as a tax on deposits the combination of reserve requirements and inflation results in a lower steady state utility than a direct tax on deposits the optimal monetary policy when reserves are required is to minimize reserve requirements and inflate without limit the stock of fiat money

estimating bargaining power in the market for existing homes although bargaining is common in markets for heterogeneous goods it has largely been ignored in the hedonic literature in a break from that tradition we establish sufficient conditions that permit one to identify the effect of buyer and seller bargaining on hedonic models our model is estimated using a previously overlooked feature of the american housing survey that permits us to observe characteristics of both buyers and sellers results suggest that household wealth gender and other demographic traits influence bargaining power in addition variation in bargaining power arising from the presence of school age children accounts for anomalous seasonal patterns reported in various widely cited indices of quality adjusted house prices

the effect of power plants on local housing values and rents abstract this paper uses restricted census microdata to examine housing values and rents for neighborhoods in the united states where power plants were opened during the 1990s compared to neighborhoods with similar housing and demographic characteristics neighborhoods within 2 miles of plants experienced 3 7 decreases in housing values and rents with some evidence of larger decreases within 1 mile and for large capacity plants in addition there is evidence of taste based sorting with neighborhoods near plants associated with modest but statistically significant decreases in mean household income educational attainment and the proportion owner occupied

internal migration and the environmental kuznets curve for us hazardous waste sites abstract in the recent special issue of ecological economics devoted to the environmental kuznets curve ekc hypothesis rothman speculates that what appear to be improvements in environmental quality may in reality be indicators of increased ability of consumers in wealthy nations to distance themselves from the environmental degradation associated with their consumption rothman d 1998 environmental kuznets curves real progress or passing the buck a case for consumption based approaches ecol econ 25 178 consistent with rothman s general hypothesis of distancing as a possible source of ekc results this empirical study advances and tests a line of argument in which internal migration plays a central explanatory role for an observed ekc for us hazardous waste sites two specific hypotheses tested are i proximity to hazardous waste site build up emerges as a factor in the migration decisions of individuals as per capita income increases beyond a threshold level and ii the level of income at which the ekc turns downwards is equal to the threshold level of income in i results provide evidence that migration is a contributing factor to the observed ekc

income taxes and entrepreneurs use of labor we investigate the effect of entrepreneurs personal taxes on their use of labor analyze the tax returns of sole proprietors before and after the tax reform act of 1986 and determine how the substantial reductions in marginal tax rates affected their hiring decisions and wage bills individual income taxes exert a statistically and quantitatively significant influence on the probability of hiring workers raising the entrepreneur s tax price by 10 raises the mean probability of hiring by about 12 further taxes influence total wage payments to workers the tax price elasticity of the median wage bill is about 37

understanding domestic savings an empirical approach abstractthere are two unusual and important features in the evolution of the savings rate in chile first the economy increased the average savings rate by 11 percentage points in the period 1985

could higher taxes increase the long run demand for capital theory and evidence for chile abstract on theoretical grounds alone there is no a priori reason why higher taxes should reduce the desired capital stock since a tax increase reduces marginal returns but also increases depreciation and interest payment allowances using a panel of chilean corporations this paper estimates a long run demand for capital valid for a general adjustment cost structure changes in the corporate tax rate are found to have no effect on the long run demand for capital furthermore when making investment decisions firms ignore the marginal rates paid by their stockholders suggesting the presence of a corporate veil

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

reserve requirements and economic stability reserve requirements have become a common institutional feature of our monetary systems they are widely held to be indispensable for zfficient control of the financial sector of the economy yet relatively little analysis has been directed at the question of what constitutes an optimal level and structure of reserve requirements in the traditional literature the major exceptions concetn some discussions of the extreme values of 100 percent or zero requirements especially the former see e g 1 5 6 7 10 for a zero required reserve proposal see 3 in recent years some newer studies dealing with these issues have appeared see e g 8 9 11 12 15 in all of these studies the focus is almost exclusively on money stock control generally speaking their results support the 100 percent reserves idea though such a scheme is usually seen as infeasible for political or institutional reasons leading to recommendations to set requirements as high as possible against deposits included in the money stock subject to whatever constraints of this nature are perceived the underlying idea of course is that this minimizes the influence of private sector disturbances on the money stock by lowering the money multiplier and making it equal to one in the extreme case of a 100 percent requirement reserve requirements are comparable to a tax on a particular economic activity namely the production of deposit accounts as such they have efficiency effects similar to those of a tax on other types of activities although this has always been

a comparison of inflation forecasts interest rate models provide slightly better monthly forecasts and substantially better eight and fourteen month forecasts of inflation than a univariate time series model the livingston surveys underestimate eight and fourteen month inflation rates especially during the high inflation period of 1978 81 in contrast eight and fourteen month inflation forecasts extrapolated from one month interest rates show little bias and track ex post eight and fourteen month inflation rates better than the survey forecasts

macroeconomic activity and monetary policy actions some preliminary evidence monetary policy is conducted through open market operations loans at the discount window and changes in the reserve requirement structure the purpose of this paper is to formally investigate the notion that the effect of changes in reserve requirement ratios is different from the effect of other policy tools this is accomplished by decomposing the monetary base into those changes caused by changes in reserve requirement ratios and those caused by other monetary policy actions some preliminary evidence suggesting differential real effects from the policy tools is provided copyright 1992 by ohio state university press

how money affects real output this paper decomposes the money stock into constituent parts to examine the relationship between monetary variables and real economic activity using vector autoregression for 1954 to 1979 the first decomposition reveals that innovations in money multiplier growth rates are approximately three times more influential in determining real output growth than are monetary base growth innovations the second decomposition includes components of the money multiplier to identify the importance of actions of the public the banking community and the monetary authority the results suggest that the public and the fed had a significant impact on influencing real output growth copyright 1989 by ohio state university press

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

regulation and capitalization of environmental amenities evidence from the toxic release inventory in massachusetts environmental regulation in the united states has undergone a slow evolution from command and control strategies towards market based regulations one such innovation is the toxics release inventory tri a regulation that requires polluting e rms to publicly disclose information about their toxic emissions the basic tenet of this regulation is that it corrects for informational asymmetries between polluters and households allowing communities to pressure polluters to decrease their emissions policy makers have judged the tri a tremendous success as national releases declined by 43 between 1988 and 1999 yet many of the fundamental problems which are known to lead to the classic failure of the coase theorem such as high transaction costs and dife culties in organizing cast doubt on the effectiveness of disclosure rules alone to lead to an efe cient outcome in the caseof pollution we use an event study methodology with high quality data on house prices and other local attributes to assess the extent to which the public values changes in toxic releases and thus the success of tri our major e ndings include 1 declines in toxic releases appear unrelated to any political economy variables that might lead to public activism 2 initial information released under tri had no signie cant effect on the distribution of house prices and 3 house prices show no signie cant impact of declines in reportedtoxic releases over time standard errors aresmall enoughthat we can reject the hypothesis that large declines in toxic releases lead to more than a 0 5 increase in house prices these results also hold when we control for differences in the availability of information on tri and the possible effect of expectations our e ndings cast doubt on the ability of the public to process complex information on hazardous emissions and support the coase theorem in that right to know lawssuch as tri may not be the most effective form of environmental regulation

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

are business startups debt rationed using a large random sample of u k start ups and a rich data set the paper demonstrates that human capital is the true determinant of survival and that the correlation between financial capital and survival is spurious provision of finance is demand driven with banks supplying funds elastically and business requests governing take up firms self select for funds on the basis of the human capital endowments of the proprietors with better businesses more likely to borrow a reason why others have seemingly identified start up debt gaps may be the failure to test a sufficiently rich empirical model copyright 1996 by royal economic society

the choice of functional forms for hedonic price equations comment abstract rosen 13 freeman 4 halvorsen and pollakowski 6 and others have stressed that economic theory does not suggest an appropriate functional form for hedonic price functions 1 it consequently is reasonable to try several functional forms and utilize the multiple regression equation with the best performance in this spirit halvorsen and pollakowski 6 recommend using the box cox flexible functional form for hedonic analysis and measuring best performance with a goodness of fit test the box cox methodology has also been adapted in hedonic studies by goodman 5 linneman 10 blomquist and worley 1 and eberts and gronberg 3 2 the box cox is particularly suited for testing functional forms because many familiar forms such as semilog log linear and translog are subsets of the flexible box cox permitting nested hypothesis testing in this note we illustrate that the formal hypothesis testing advantage of the box cox functional form is purchased at the expense of other important goals the goal of most hedonic studies is to estimate the prices of the characteristics to measure the response to changes in the prices and or to predict future expenditures using a best fit criterion to choose functional forms does not necessarily lead to more accurate estimates of characteristic prices in fact the large number of coefficients estimated with the box cox functional form reduces the accuracy of any single coefficient which could lead to poorer estimates of specific prices second because any negative number raised to a noninteger real power is imaginary the traditional box cox functional form is not suited to any data set containing negative numbers third the box cox functional form may be inappropriate for prediction since the mean predicted value of the untransformed dependent variable need not equal the mean of the sample upon which it is estimated the predicted untransformed variable housing value will be biased the predicted untransformed dependent variable may also be imaginary fourth the nonlinear transformation results in complex estimates of slopes and elasticities which are often too cumbersome to use properly we discuss each of these drawbacks and quantify them when possible in the remainder of this note

an empirical study of income growth and manufacturing industry pollution in new england 1980 1990 abstract this paper is an empirical examination of how a community s income growth is affected by polluting manufacturing activity the hypothesis i test is that this activity has two conflicting effects first industrial investment encourages economic growth through the creation of employment and other positive economic spillover effects and second the associated pollution causes out migration of residents i hypothesize that a community that is initially relatively wealthy will experience relatively more out migration of its higher income residents who are assumed to have a lower tolerance for pollution thus such communities will grow less in response to such investment compared to its poorer neighbors therefore in my econometric model the marginal effect of pollution on income growth is allowed to vary with initial incomes i use a unique data set that incorporates toxics release inventory tri and census tract level data for new england for the years 1980 and 1990 the estimated effect of pollution on growth is negative on average and is more negative in initial incomes in an effort to measure the out migration effects of pollution i use a separate measure of toxic pollution i find that holding constant total pollution toxic pollution has a more negative effect on growth for wealthier communities these results are consistent with the above hypotheses

politics and social costs estimating the impact of collective action on hazardous waste facilities firms that generate negative externalities may consider the effects of their location on the surrounding environment because of the right of their prospective neighbors to demand compensation for pollution and raise the transaction costs of location since communities vary both in the value individuals place on the environment and in the ability of residents to organize politically locations that generate the least political opposition may not be the locations that result in the lowest externalities this article tests whether the degree to which firms internalize their externalities depends on the ability of affected communities to engage in collective action the results indicate that firms processing hazardous waste when deciding where to expand capacity do take into account variations in the potential for collective action to raise their costs

u s housing prices and the fukushima nuclear accident abstract did the nuclear catastrophe at fukushima in march 2011 cause individuals to reappraise the risks they attach to nuclear power plants we investigate the change in home prices in the u s after the fukushima event to test the hypothesis that home prices in the proximity of power plants fell due to an updated nuclear risk perception using a difference in differences approach we do not find evidence in support of the hypothesis that individuals reappraised the risks associated with nuclear power plants according to our results home prices close to nuclear reactor sites did not fall relative to home prices at other locations in the u s

hazardous waste hits hollywood superfund and housing prices in los angeles this paper contributes to the ongoing debate concerning the effect of various actions taken by the u s environmental protection agency under cercla commonly known as the superfund program on housing prices this study uses a housing transaction panel dataset encompassing the five major counties of the los angeles combined statistical area to estimate the program s influence on the local housing market using house and time varying census tract fixed effects i am able to avoid many of the endogeneity problems seen in previous research attempting to measure the superfund treatment effect an estimate of the effect on housing prices is given for each of the major events that occur under a typical superfund remediation after controlling for confounding correlated unobservables i find a 7 3 increase in sales price for houses within 3 km of a site that moves through the complete superfund program the analysis gives evidence of positive price appreciation for housing markets and serves as a lower bound for measuring remediation benefits

on modeling and interpreting the economics of catastrophic climate change with climate change as prototype example this paper analyzes the implications of structural uncertainty for the economics of low probability high impact catastrophes even when updated by bayesian learning uncertain structural parameters induce a critical tail fattening of posterior predictive distributions such fattened tails have strong im plications for situations like climate change where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages this paper shows that the economic consequences of fat tailed structural uncertainty along with unsureness about high temperature damages can readily outweigh the effects of discounting in climate change policy analysis

further evidence on the relationship between federal government debt and inflation does an increase in the federal debt cause inflation dwyer 1982 using a par value measure of debt finds no support for such a causal link cox 1985 using a market value measure finds evidence that increases in debt produce higher inflation rates we reconcile these results by demonstrating that failure to capture the interest rate effects inherent in the market value measure accounts for the finding that debt causes inflation incorporating interest rates into our test equations using the market value series leads us to conclude that like the par value series results increases in federal debt do not cause higher rates of inflation

undesirable facilities and property values a summary of empirical studies abstract undesirable land uses are expected to impose health or amenity risks on surrounding communities these risks are expected to be translated economically into negative effects on adjacent property values these negative effects may be present even when such uses possess offsetting advantages of proximity such as employment opportunities the purpose of this study is to summarize empirical studies completed to date that test whether undesirable land uses have observable negative effects on adjacent property values this information may be useful in assessing minimum valuations of terminating undesirable land uses such as clean up of hazardous sites or compensation necessary to ameliorate the economic impacts of new undesirable uses

hazardous waste sites and property values in the state of new jersey the polluter pays principal is justified as a deterrent to future pollution however the us experience suggests that it has considerably reduced the clean up rate of existing hazardous waste sites coaseapos s theorem is used as basis to propose that a partnership between the polluters and property owners near these sites will not only ease financial burden but will also speed up the pace of cleanup a hedonic price model is used to empirically estimate the impact of siting of hazardous waste sites on property values and determine the economic feasibility of the proposed partnership the empirical estimates are based on municipality level data from the state of new jersey the benefis from speedy clean up of hazardous waste sites to new jersey property owners are observed to exceed the cleanup cost of these sites