new hedonic technique for estimating attribute demand an application to the demand for automobile fuel efficiency a new hedonic procedure is applied to estimate the effects of gasoline price on the demand for automobile attributes and fuel efficiency direct application of a comparative statics analysis circumvents the problems of identification and severe multicollinearity affecting previous hedonic studies the results indicate that the effect of induced changes in automobile attributes in response to increases in the price of gasoline is to substantially increase fuel efficiency the estimated elasticities of fuel efficiency with respect to the price of gasoline imply that the long run own price elasticity of demand for gasoline is greater than unity 31 references

a hedonic approach to estimating the supply of variety attributes of a subsistence crop the article extends the household hedonic model by estimating a supply function for variety attributes of a subsistence crop in a developing economy the model is applied to bananas in uganda making use of disaggregated data on variety specific farm gate banana bunch prices and attributes while accounting for the semisubsistence nature of banana producing households the article is motivated by the need to understand the attribute trade offs made by farmers at the farm gate in light of targeted variety improvement efforts and their impact on banana markets whether variety improvement will pay off at the market level requires a more detailed examination of the relative worth of banana attributes within the structure of consumer preferences and production technologies related to bananas in uganda the results confirm the importance of consumption and production attributes in selling behavior quality and bunch size are found to be complements at the farm gate banana bunches that capture a premium at the market will be those that provide bundles of desirable consumption and production attributes simultaneously by revealing important price attribute relationships the findings provide guidance for crop improvement efforts and diversification choices while taking into account implicit market signals for output attributes

doing good but not that well a dilemma for energy conserving homeowners abstract in this paper the issue of market capitalization of energy efficient buildings is addressed by considering single family housing in sweden and through analyzing as to what extent the market price for a house is influenced by its energy performance are swedish homeowners doing well by doing good we make use of information provided by the swedish energy performance certificates for single family homes matched with data on the corresponding transaction prices household characteristics and attributes of the neighborhood the resulting database covering about 77 000 individual observations is used to analyze the relationship between the price of a house and its energy performance by means of a hedonic model unlike most other studies the energy performance is decomposed into energy consumption and several other variables characterizing the energy system the main question addressed is if there is a price premium for energy efficient housing in sweden our results differ from earlier studies and indicate no price premium related to the energy consumption but substantial premiums for housing attributes that improve the energy efficiency a likely explanation is that prospective buyers of new homes base their expectations about future energy consumption on those attributes rather than on the energy consumption of the previous owner

residential consumption of gas and electricity in the u s the role of prices and income abstract we study the residential demand for electricity and gas working with nationwide household level data that cover recent years namely 1997 2007 our dataset is a mixed panel multi year cross sections of dwellings households in the 50 largest metropolitan areas in the united states as of 2008 we estimate static and dynamic models of electricity and gas demand we find strong household response to energy prices both in the short and long term from the static models we get estimates of the own price elasticity of electricity demand in the 0 860 to 0 667 range while the own price elasticity of gas demand is 0 693 to 0 566 these results are robust to a variety of checks contrary to earlier literature metcalf and hassett 1999 reiss and white 2005 we find no evidence of significantly different elasticities across households with electric and gas heat the price elasticity of electricity demand declines with income but the magnitude of this effect is small these results are in sharp contrast to much of the literature on residential energy consumption in the united states and with the figures used in current government agency practice our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated

industrialization and consolidation in the u s food sector implications for competition and welfare good sources for information on recent developments in food market structure include barkema drabenstott and welch u s department of agriculture 1996b and rogers my objective is not to add to this literature but rather to consider what we have learned as a profession about the rapid consolidation in food processing and distribution what are its implications for market power economic efficiency and the distribution of economic welfare among producers consumers and marketers

measuring market power in multi product oligopolies the us meat industry this paper develops and estimates an economic model for measuring market power in a quantity setting oligopoly engaged in the joint production of demand related goods the model which allows for firms conjectures about both same and cross market responses to own output variation is applied to the us meat beef and pork industry he hypothesis that the industry s equilibrium reflects price taking behaviour is rejected the hypothesis of no cross effects cannot be rejected roughly half of the farm to retail price spreads for beef and pork appear to be attributable to market power

automobile prices and quality did the gasoline price increases change consumer tastes in the u s a hedonic model of automobile prices that takes gasoline costs into account is developed and used to examine whether gasoline price increases especially those related to the 1973 and 1979 oil shocks changed consumer evaluations of the relative qualities of used cars in the u s during 1970 1981 we test the null hypothesis that the characteristics coefficients remained constant over time it is rejected if gasoline costs are excluded from the model but not if they are included alternative approaches are developed to show that the gasoline price increases alone can explain much of the observed changes in the coefficients

a study on the implementation of renewable heating technologies in the domestic sector in ireland with implications on consumers decision making abstract the paper critically reviews and explores the impact of renewable energy heat policies to induce technological change in ireland it is in response to the challenge of better understanding the broad effects and attributes of renewable energy policy instruments in ireland and beyond using the irish residential sector as a case study and analysing data of more than 31 600 technology installations under the irish government s greener homes scheme ghs the paper assesses the extent to which policy makers may be informed of the willingness of consumers to adopt these technologies in their homes in doing so it attempts to provide valuable guidance for policy evaluation in relation to renewable energy in the residential sector it represents investment decisions and technological choice by the end user and reflects the growing concern among energy policy markets regarding the representation of user preferences the overall intent is to investigate the implications of analysing different variables and their contribution to making more balanced renewable energy policies it provides a critical analysis of the greener homes scheme the key instrument for implementing ireland s renewable heating policy from 2006 to 2010 established to induce technological change within the residential sector in assessing the impact of the scheme attention focuses on decision frameworks for technological choice and the treatment of market and behavioural failures it considers how consumers have responded to new technological policies aimed at deploying renewable heat technologies and the specific policies aimed at advancing certain technologies over others through a case study investigation the paper explores the relationship and dependencies that influence consumers decision making regarding the choice of renewable energy heating technologies in the domestic sector in ireland consumer preferences and their subsequent investment decisions motives and technological choice are reflected it concludes that while economic factors are important a much broader variety of determinants is required when analysing the process of adoption of technology

taste changes in the demand for food by demographic groups in the united states a nonparametric empirical analysis this study uses nonparametric techniques to analyze the stability of demand for nineteen major food categories among various demographic groups in the united states households are divided into population groups by income the head s age and the spouse s education level the data used are from the 1980 90 diary portion of the bureau of labor statistics s annual consumer expenditure survey the programming model developed by sakong and hayes with the modifications suggested by chalfant and zhang is used to test for and measure taste changes substantial differences in preference trends between population groups are found for many of the food commodities

hedonic amenity valuation and functional form specification this paper uses gis data to develop variables representing the physical extent and visibility of surrounding land use cover features in a hedonic model of a rural suburban residential housing market three equations are estimated to determine if views

an empirical test of monopoly behaviour an application to the hardwood case a comment a recent article in this journal alexander 1988 tests whether the exchange of price information in the 1921 hardwood case was a means of fixing prices or a way of coping with costly information alexander makes two serious errors both errors involve the incorrect use of a technique used to measure price cost margins to determine the extent to which an industry is monopolistic competitive or somewhere in between i reestimate alexander s model correcting his two errors in addition i improve his data set alexander s conclusion that the price association was pro competitive although drawn incorrectly is shown to be correct

dietary bounds and unshackled demand specifications conventional tests of revealed preference axioms warp and garp may yield false rejections of the hypothesis of a unique preference ordering when consumers face constraints in addition to a budget constraint in this paper nonparametric tests of warp and garp are generalized for consumers who enforce multiple constraints in conjunction with conventional tests the modified tests are used to reject meat demand specifications that are functions solely of price and expenditure variables richer specifications that include consumer perceptions of the fat content of meats and the fat constraint value in addition to conventional price and expenditure variables cannot be rejected

doing well by doing good green office buildings this paper provides the first credible evidence on the economic value of the certification of green buildings in the commercial sector value derived from impersonal market transactions rather than engineering estimates we match publicly available information on the addresses of energy star and leed rated office buildings to a commercial data source detailing the characteristics of u s office buildings and their rental rates we analyze the micro data on 694 certified green buildings and on 7489 other office buildings located within a quarter mile of the certified buildings we find systematic evidence that rents for green offices are about two percent higher than rents for comparable buildings located nearby effective rents i e rents adjusted for the occupancy levels in office buildings are about six percent higher in green buildings than in comparable office buildings nearby at prevailing capitalization rates conversion of the average non green building to an equivalent green building would add more than 5 million in market value these results are robust to the statistical models employed

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

the production of housing services and the derived demand for residential energy most studies of residential energy usage treat energy as a final consumer good this study explicitly considers the production of housing service flows from stocks of real estate and flows of operating inputs and considers the demand for residential energy as a factor input the empirical results based upon analysis of a sample of newly constructed dwellings and their occupants are used to evaluate the effects of energy price changes on the price of housing services and on the demand for housing and real estate thus indicating the extent of residential energy conservation in response to higher prices finally the results are used to analyze federal and state tax subsidies for residential energy conservation

energy performance ratings and house prices in wales an empirical study this paper investigates the effect of energy performance certificate epc ratings on residential prices in wales drawing on a sample of approximately 192 000 transactions the capitalisation of energy efficiency ratings into house prices is investigated using two approaches the first adopts a cross sectional framework to investigate the effect of epc rating on price the second approach applies a repeat sales methodology to investigate the impact of epc rating on house price appreciation statistically significant positive price premiums are estimated for dwellings in epc bands a b 12 8 and c 3 5 compared to houses in band d for dwellings in band e 3 6 and f 6 5 there are statistically significant discounts such effects may not be the result of energy performance alone in addition to energy cost differences the price effect may be due to additional benefits of energy efficient features an analysis of the private rental segment reveals that in contrast to the general market low epc rated dwellings were not traded at a significant discount this suggests different implicit prices of potential energy savings for landlords and owner occupiers

endogeneity testing in a supply and demand framework the powers of wu hausman endogeneity tests are related to the normalization d ecision in estimating demand equations power is not invariant to the choice bet ween quantity and price as the dependent variable a theoretical result due to n akamura and nakamura 1984 is used to explore the dependence of power on parame ters of the supply and demand system the theoretical result is corroborated wit h a monte carlo experiment the power results are used to analyze the u s deman d for poultry meat wherein price but not quantity is found to be predetermined copyright 1986 by mit press

unobservables in consumer choice residential energy and the demand for comfort a model of consumption of residential energy in dwellings is developed distinguishing between attributes of housing that provide direct benefits to consumers and attributes that serve as inputs in the production of final goods for example the thermal comfort of dwellings empirical estimates are made of the mode based upon the annual housing survey and the results are used to calculate the effects of changes in energy prices on the consumption of housing residential energy and other goods the analysis suggests that the adjustment process within the housing market permits a great deal of substitution in response to energy price changes copyright 1989 by mit press

the poultry market demand stability and industry structure the stability of the demand for poultry meat and specification issues in its estimation are explored the analysis concludes that the demand for poultry meat shifted out in the early 1970s at the same time the demand relationship between poultry and pork changed from substitution to independence a second conclusion is that poultry price is predetermined for demand in annual u s data while quantity is not a predetermined price suggests several market structures exogeneity tests are performed to distinguish among them the results are consistent with a competitive constant returns to scale industry facing elastic factor supplies

model of household electricity conservation behavior in this paper the authors develop a model that explains household choice of electricity conservation modes the model is based on the premise that households will adopt those conservation modes that yield benefits greater than perceived costs they find that households differ in the conservation modes they adopt high income households are more likely to adopt expenditure intensive methods while low income households are more likely to adopt time intensive conservation methods the results suggest a possible explanation as to why high income families and residents of single detached homes are observed to save the largest absolute amount of energy a popular explanation is that these households consume the most energy and thus would be most likely to benefit the authors suggest an alternative explanation 37 references 4 tables

inter firm differences in fed cattle prices in the southern plains pooled cross section time series data were used to assess inter firm differences in fed cattle prices paid by southern plains meatpackers during june 1989 significant price differences were found among packers even after accounting for numerous factors affecting fed cattle value some buyers paid higher prices and some lower prices than did one of the three largest packers as a group the big three firms paid lower prices than did smaller firms both in the southern plains as a whole and in three of its subregions

the econometrics of nonlinear budget sets traditional empirical analysis of consumer demand has usually made the assumption of linear budget sets that is the consumer is assumed to purchase any desired quantity at a constant price subject to a budget constraint the major exception to this framework is the analysis of demand when some goods are rationed 2 in the rationed case the price is constant up to a quantity limit in contrast to the rationed case here i consider the situation where the price varies with the amount of the good purchased empirical situations with nonconstant prices come readily to mind and of course they have received much recent attention from theorists since mirrlees 44 paper on optimal nonlinear taxation the following examples are meant to give a partial listing of cases when nonlinear budget sets occur i electricity prices many electric utilities engage in declining block pricing that is the marginal price of successive kwh s of electricity decrease at a given number of points determined by total demand thus the budget set is piecewise linear houthakker 36 was the first to propose an approach to this problem taylor 51 analyzes the problem at length and hausman kinnucin and mcfadden 31 use an instrumental variables estimator to provide consistent estimates of the demand function

integration of price depending demand reactions in an optimising energy emission model for the development of co2 mitigation strategies abstract optimising techno economic energy emission models are applied to develop and analyse cost effective co2 mitigation strategies on national and international levels one shortcoming of existing models is the missing integration of behavioural changes due to an increase in energy prices caused by the structural changes in the energy sector in order to reach the political targets for a co2 emission reduction therefore a partial equilibrium approach based on an iterative algorithm is created and applied in a co2 study for the federal republic of germany frg the results show that cost effective energy strategies avoiding co2 emissions have to consider the consumer price reactions

natural catastrophe insurance when should the government intervene this paper develops a theoretical framework for analyzing the decision to provide or buy insurance against the risk of natural catastrophes in contrast to conventional models of insurance the insurer has a non zero probability of insolvency which depends on the distribution of the risks the premium rate and the amount of capital in the company when the insurer is insolvent each loss reduces the indemnity available to the victims thus generating negative pecuniary externalities our model shows that government provided insurance will be more attractive in terms of expected utility as it allows these negative pecuniary externalities to be spread equally among policyholders however when heterogeneous risks are introduced a government program may be less attractive in safer areas which could yield inefficiency if insurance ratings are not chosen appropriately

market and cost structure in the u s beef packing industry a plant level analysis a resurgence of consolidation in the u s meat packing industry in the past few decades has stimulated academic and policy debate issues raised include the role of cost economies in driving these patterns and the effects on the agricultural sector cattle producers from market power here plant level cost and revenue data for u s beef packing plants are used to estimate a cost based model incorporating cattle and output market pricing behavior the robust results indicate little market power exploitation in either the cattle input or beef output markets and that any apparent evidence is counteracted by cost efficiencies such as utilization and scope economies copyright 2001 oxford university press

an empirical test of monopoly behaviour an application to the hardwood case 1988 an empirical test of monopoly behaviour an application to the hardwood case applied economics vol 20 no 8 pp 1115 1127

the logic of testing structural change in meat demand a methodological analysis and appraisal in the past two decades the profession has expended valuable resources testing structural change in meat demand with mixed results overlooked to date is a fundamental methodological problem that transcends all methods of testing for structural change in this study a methodological framework is used to show that there is no valid test of structural change because of this result additional criteria from the methodology literature are used to evaluate the literature on structural change in meat demand and to provide suggestions for fertile areas of future research

the transition from monopoly to competition the case of housing insurance in baden wurttemberg abstract in 1992 the european community decided to abolish the housing insurance monopolies in germany in baden wurttemberg this has led to the end of an institution that was more than two centuries old the purpose of the paper is to analyse the very negative consequences this step has had for consumers particular emphasis is placed on two points 1 a the important increase in prices due to the additional costs imposed by competition and 2 b the difficulty of maintaining the global coverage against natural damages that was one of the hallmarks of the monopoly situation

sensitivity of price elasticity of demand to aggregation unobserved heterogeneity price trends and price endogeneity evidence from u s data abstract price elasticity estimates of residential electricity demand vary widely across the energy economics and policy literature in this paper we seek to explain these findings using three nationwide datasets from the u s the american housing survey forms eia 861 and the residential energy consumption survey we examine the role of the sample period level of aggregation use of panel data use of instrumental variables and inclusion of housing characteristics and capital stock our findings suggest that price elasticities have remained relatively constant over time upon splitting our panel datasets into annual cross sections we do observe a negative relationship between price elasticities and the average price whether prices are rising or falling appears to have little effect on our estimates we also find that aggregating our data can result in both higher and lower price elasticity estimates depending on the dataset used and that controlling for unit level fixed effects with panel data generally results in more inelastic demand functions addressing the endogeneity of price and or measurement error in price with instrumental variables has a small but noticeable effect on the price elasticities finally controlling for housing characteristics and capital stock produces a lower price elasticity

estimating the degree of market power in the beef packing industry a technique for assessing the degree of monopoly power developed by appelbaum 1979 1982 is extended here to permit measurement of monopsony power as well data from the u s beef packing industry are examined the results reveal small but statistically significant monopoly monopsony price distortions in slaughter cattle and wholesale beef markets but in spite of a recent trend toward heightened concentration in the industry give no indication that performance has become appreciably less competitive of late this abstract was borrowed from another version of this item

testing for switching market conduct this paper tests for switching market conduct in an oligopsonistic industry the model adopts bresnahan s procedure for identifying the oligopoly solution and integrates the procedure with a switching regression model applied to the us beef slaughter industry two distinct regimes of conduct in the industry were identified the two regimes are consistent with the time periods during which the industry has undergone major structural change

testing for structural change the demand for meat recent research on meat demand demonstrates the importance in empirical demand analyses of identifying and measuring structural changes this paper develops and applies a method of analyzing structural changes in preferences using parameters from empirical demand equations derived from an underlying utility function structural changes alter the marginal rate of substitution between goods at fixed points of prices and quantities the evolution of preference changes is measured by time varying multiplicative terms in a translog utility function the application to meat concludes that structural change occurred in the 1970s and provides measures of the time pattern of demand shifts

accounting for changes in tastes health concerns are thought by many to have shifted consumption away from red meats though econometric evidence is mixed testing for structural change is difficult especially when one time series is used for both estimating demand equations and testing their stability specification errors may suggest a shift where none has occurred using nonparametric demand analysis we find that meat consumption patterns in the united states and australia can be explained using only relative prices and expenditures only imposing particular functional forms can reverse the conclusion suggesting that specification errors in econometric demand studies can account for findings of taste changes

characteristics and hedonic pricing of differentiated beef demands we estimate a cbs system model of u s derived demand for meat we use this model 1 to examine relationships between three quality categories of beef and three other meats and 2 to simulate how taste shifts have affected demands for meats over time we extend previous studies by disaggregating wholesale beef production into three quality categories 1 usda choice grade or higher 2 usda select or lower and 3 cow and bull beef innovative features of our empirical model include a breakout of table cuts into choice and select and the use of a hedonic characterization of the two breakouts to value choice ness and beef ness our model demonstrates important shifts in separate demands for choice and select beef we show that separately the demand for choice grade beef declined in the 1980s and 1990s and the demand for select beef increased a departure from the relatively stable demand characterizations of more aggregated measures of combined choice and select beef jel classification q11 q13

non structural measures of competition toward a synthesis of alternatives abstract procedures for detecting or measuring market power have been suggested in recent years by iwata rosse and panzar and bresnahan this paper integrates elements from all three approaches to provide a single more unified alternative to the structure conduct performance paradigm

the translog utility function and the demand for money in the united states in recent years considerable effort has been directed towards establishing the nature of the relationship between money and nearmonies but with mixed success the approaches vary from multi interest rate single equation studies to the careful simultaneous equations studies summarized and amended by feige and pearce 1977 and extended recently by donovan 1978 offenbacher 1979 and barnett 1980 the empirical results also vary with numerous studies favoring only one interest rate see the surveys in fisher 1978 1983 some claiming that a variety of entities are close substitutes for money e g chetty 1969 and others showing that weak substitution or even complementarity may be the result of the measurement of elasticities of substitution between money and a number of other assets e g feige and pearce 1977 offenbacher 1979 and barnett 1980 the debate seems to have overshadowed a second and equally intriguing issue which centers on the establishment of an acceptable definition of money the basic idea of this study is to take an approach that takes account of the different degrees of moneyness possessed by the various monetary assets this paper produces quantitative estimates of the degree of substitutability of other monetary assets for money in the context of a flexible functional form model with a

hedonic prices property values and measuring environmental benefits a survey of the issues this paper provides a review of the theoretical basis and the assumptions required in order to use hedonic price equations derived from property value data to obtain measures of the prices and the inverse demand functions for environmental amenities such as air quality it also includes a review and assessment of existing empirical applications of the technique to problems of air and water quality and urban noise

does energy efficiency matter to home buyers an investigation of epc ratings and transaction prices in england abstract this paper investigates whether energy performance ratings as measured by mandatory energy performance certificates epcs are reflected in the sale prices of residential properties this is the first large scale empirical study of this topic in england involving 333 095 dwellings sold at least twice in the period from 1995 to 2012 applying hedonic regression and an augmented repeat sales regression we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre the price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi detached dwellings the evidence is less clear cut for rates of house price growth but remains supportive of a positive association overall the results of this study suggest that energy efficiency labels have a measurable and significant impact on house prices in england

privatisation of utilities and the asset value problem privatised utilities are typically characterised by both undervaluation and underpricing when faced with this problem regulators have tended to employ a market value approach to determine the regulatory asset base this paper analyses this approach and shows that it magnifies the impact of any short lived error at privatisation and has the effect of entrenching relative errors forever we then address the question whether there is an alternative mechanism that can accommodate the undervaluation problem but does not fall foul of the difficulties inherent in the market value approach the alternative we suggest is to use the regulatory agency s own estimate of the company s value which we call the model based asset value it is shown that errors made at the time of privatisation do not have the same impact on future prices and hence far less effect on the potential sale price

competition in the us meatpacking industry is it history the us meatpacking industry has become concentrated to a degree not experienced since the days of the beef trust a century ago a number of mainstream studies have investigated if such concentration has been detrimental to competition just as earlier studies may have helped shape competition policy towards meatpacking a century ago contemporary studies have made their way into current discussions and may shape competition policy at the turn of this century this paper asks whether or not contemporary studies are useful in informing competition policy after comparing how competition looks from the econometric vantage point with how it looks from the vantage point of the industry s 300 yr history this article concludes that mainstream studies are more useful for a competition policy targeting conduct rather than structure

economics of consolidation in the beef sector research challenges in 1980 congressional hearings were conducted regarding the potentially negative dimensions of market power by meatpackers concentration levels had increased during the 1970s concern was sufficient to prompt the introduction of two pieces of proposed legislation both of which would have limited the size of packing operations during the hearings testimony was replete with dire predictions of what would happen to industry performance if concentration were to increase still further parker testified that the research literature documents rapid increases in prices and in profits as the four firm concentration moves up from 40 to 60 and higher viewed in the presence of the content and orientation of those congressional hearings the happenings later in the 1980s appear incomprehensible if the important threshold in terms of the four firm concentration ratio is around 40 why was the massive consolidation of the beef sector during the 1980s allowed by the regulatory authorities what research methodology was brought to bear on these issues is it adequate the answers to these related questions are not apparent but they are clearly important if the decisions by the regulatory authorities during the 1980s were not based on solid economic research then important issues confront the profession either the research methodology must be modified or the empirical results of our research were ignored the objective of this paper is to explore the economics of the consolidation in beefpacking to look at why it occurred and why it was allowed to occur and to draw inferences about our research efforts the perspective offered is that of a marketing economist looking ahead to an uncertain future for the beef sector in the 1990s

structural change in the demand for meat economists have long thought that shocks in the economy sometimes lead to permanent changes in behavioral relationships hence supply or demand elasticities estimated from econometric models may change over time the source of such structural change may be technological adoption a shift in consumer preferences or an institutional change one way to handle this problem in linear models is to allow the parameters to change as the situation changes so that the model provides a local approximation of the behavioral relationship this approach is an attractive way to deal with structural change problems econometricians have extended the classical