the impact of carbon emission reducing design features on office occupiers choice of premises energy saving measures if incorporated into existing and new buildings can help the uk to achieve its ambitious goal to reduce carbon emissions by 80 per cent by 2050 yet the penetration of such technologies has been slow in the commercial real estate market this paper examines the attitudes and preferences of office end users and their acceptance of carbon emission reducing technologies it employs conjoint analysis to model the real estate decision making of 150 respondents who claimed to have an input into their organisation s choice of premises the findings demonstrate that functionality and accessibility remain top priorities in occupiers choice of premises lower rents improved corporate image and productivity are revealed as attributes that could compensate occupiers for energy efficient attributes that restrict control over internal environment and operation of equipment the paper discusses instruments to promote greater acceptance and penetration of carbon emission reducing design featur

an alternative approach to housing market segmentation using hedonic price data abstract much empirical research has been devoted to housing market segmentation and the implications for the application of the hedonic price model market segmentation is demonstrated empirically in j urban econ 3 2 146 166 1976 j urban econ 7 1 102 108 1980 rev econ statist 66 3 404 406 1974 there appears to be theoretical evidence j pol econ 82 1 34 55 1974 that such empirical efforts may have been less than adequate unfortunately the empirical applications of rosen s model j environ econ manag 5 81 102 1978 j urban econ 5 3 357 369 1978 do not seem to effectively account for the complexity of the factors which cause multiple equilibria market segmentation this paper demonstrates empirically that market segments can be defined along more dimensions than hitherto have been included in any analysis

planning policy and retail property markets measuring the dimensions of planning intervention there is considerable case study based evidence that changes in the public policy environment have profoundly altered the structure and operation of retail property markets in england despite this however few studies of property market performance consider the influence of retail planning policies this paper seeks to fill the gap the empirical part of the paper uses data derived from a survey of local planning authorities to construct a range of measures of planning policy stance the indicators demonstrate that the role of policy is complex and multidimensional the paper then explores the relationship between planning policies and measures of property market performance the results show that while proactive policies do not guarantee a vibrant market they can play an important part in stimulating occupier and investor demand even where there are poor economic fundamentals

can good architecture meet the market test abstract architectural quality is a public good characteristic of a building for which a market failure may occur a hedonic price equation for office space in downtown chicago is estimated to determine if the value of good architecture has been internalized by tenants or owners of commercial buildings the regression results indicate that a considerable rent premium is paid for good new architecture but not for good old architecture the results also yield information about the impact on office rent of other building characteristics such as age height location and amenities

testing for common features in north american energy markets abstract using recent advances in the field of applied econometrics we explore the strength of shared trends and shared cycles between north american natural gas and crude oil markets in doing so we use daily data from january 1991 to april 2001 on spot u s henry hub natural gas and wti crude oil prices the results show that there has been decoupling of the prices of these two sources of energy as a result of oil and gas deregulation in the united states we also investigate the interconnectedness of north american natural gas markets and find that north american natural gas prices are largely defined by the u s henry hub price trends

urban spatial variations in office commercial rents the role of spatial amenities and commercial zoning abstract the paper argues that traditional bid rent modeling is inadequate in providing the framework for empirically analyzing the whole array of location demand and most importantly supply side influences on office commercial rents within multinodal metropolises the analysis then proceeds with an alternative modeling scheme setting the stage for specifying long run reduced form office commercial rent functions differing from traditional hedonic formulations both within competitive and constrained land market settings using recent data on office commercial rents across nodes in greater los angeles the empirical analysis lends considerable support to those alternative model specifications accounting not only for firm amenities but also for worker amenities and local institutional controls

testing for the existence of office sub markets a comparison of evidence from two cities most conceptual and applied economic models of the structure of urban office markets have been developed from traditional location theory in their basic form these models tend to posit a trade of

on the impossibility of informationally efficient markets comment in a recent paper in this review sanford grossman and joseph stiglitz challenge the efficient markets notion that in an asset market at any time prices fully reflect all available information p 404 the purpose of this comment is to argue that certain theorems and comments of grossman and stiglitz do not necessarily follow when an error in the specification of the informed trader s demand function for the risky asset is corrected in theorem 5 b p 401 grossman and stiglitz show that when informed traders have perfect information concerning a risky asset s yield no overall equilibrium will exist that is there will be no equilibrium value for the proportion of informed traders x inspection of equations 8 8 and 9 p 396 helps to give intuitive reasons why this is so if no individual purchases an observation of the information point 0 that is if x 0 then for a sufficiently small value of c the cost of obtaining an observation of the information point 0 an individual could increase his expected utility by purchasing the information if some fraction of traders purchase the information point 0 that is if x 0 from equation 8 it is seen that as 0 2 0 as informed traders obtain better information small movements in 0 have a nearly infinite effect upon the informed trader s demand for the risky asset and hence upon the asset s price thus according to grossman and stiglitz for a fixed x 0 as q2 0 the price system becomes perfectly informative as to the informed trader s observation of 0 thus for x 0 and a 2 0 no individual will wish to purchase 0 at cost c but for xa c2 0 and small c it pays an individual to purchase 0 clearly then for q 2 0 no equilibrium exists equation 8 plays a crucial role in theorem 5 b however equation 8 ignores the fact that x1i the ith informed trader s demand for the risky asset is constrained by his wealth woi in fact if the informed trader has perfect information so that 0 is the return on the risky asset then the informed trader simply invests in the asset with the higher yield thus for ue2 0 equation 8 ought to read

asymmetric price responses market integration and market power a study of the u s natural gas market we studied the market performance at selected representative natural gas trading hubs in the u s and documented different price behaviors among various hubs with nymex prices as the competitive benchmark we found empirically that the spot price responses at some trading hubs were systematically asymmetric thus demonstrating a market advantage by either buyers or sellers we further found that the presence of market power was a very plausible explanation for this price behavior at some hubs

evolution of the u s natural gas industry in response to changes in transaction costs the u s natural gas industry traditionally had producers interstate pipelines and distributors linked together via bilateral long term contracts recently the federal energy regulatory commission has encouraged buyers and sellers to deal directly with each other leading first to a spot market and marketers then to market hubs and a slight trend back to longer term contracts marketers and pipelines have consolidated to take advantage of economies of scope and systems effects which larger networks provide we use transaction cost economics to explain the evolution of exchange relationships with open access to transportation and the unbundling of transportation and storage from sales

neighbourhoods in urban economics incorporating cognitively perceived urban space in economic models this paper proposes that urban economic analysis would benefit from the use of cognitively perceived neighbourhoods which are discussed within urban studies georeferenced data should be aggregated by spatially bounded units that are identifiable by citizens in order to enrich one dimensional distance as the sole variable to bring urban complexity into economic models multivariate analysis is applied to data from belo horizonte brazil to formulate four indices ranked by neighbourhoods that together represent a spatially complex non linear influence on urban real estate markets the results of the indices by neighbourhood are then tested against a traditional specification in an econometrics exercise that does not include the concepts and indices put forward the definition of neighbourhood used and the empirical results provide a thorough description of urban fabric that can fully and more accurately represent urban influence in economics while avoiding abstract distance measurement

speculation optimism and differential information speculative trading has for quite some time been an important question for at least two reasons firstly as a positive question of whether speculative behavior basically is caused by differences in information or by differences in aversion to risk secondly the question is related to the informational efficiency of decentralized market systems if access to information not currently available to the market makes possible a speculative profit the incentive to acquire information may be too excessive from a social point of view the aim of this paper is to clarify the relationship between information and speculation in his seminal article on information acquisition in decentralized market economies hirshleifer 12 showed that the private value of acquiring information depends critically on the speculative profits to be made from this information hirshleifer 12 distinguished between information foreknowledge which affects productive decisions and information which only has implications for exchange similarly fama and laffer 5 distinguish between operational information which improves a firms operating decisions and trading information which only affects trading decisions it is argued due to the speculative profits to be made from having access to information not available to the market that there are excessive private incentives to acquire information without any relevance for productive decisions

deliverability and regional pricing in u s natural gas markets during the 1980s and early 90s interstate natural gas markets in the united states made a transition away from the regulation that characterized the previous three decades with abundant supplies and plentiful pipeline capacity a new order emerged in which freer markets and arbitrage closely linked natural gas price movements throughout the country after the mid 1990s however u s natural gas markets tightened and some pipelines were pushed to capacity we look for the pricing effects of limited arbitrage through causality testing between prices at nodes on the u s natural gas transportation system and interchange prices at regional nodes on north american electricity grids our tests do reveal limited arbitrage which is indicative of bottlenecks in the u s natural gas pipeline system

a model of spatial patterns across local retail property markets in great britain property markets are commonly modelled either at relatively high levels of aggregation such as regional or national using time series data or panel data or at individual town level this paper d

measuring the effects of natural gas pipeline constraints on regional pricing and market integration abstract natural gas pipeline capacity sets physical limits on the quantity of gas that can be moved between regions with attendant price effects we find support for the hypothesis of integrated regional markets using data on daily pipeline flows and capacities in florida and southern california we estimate reduced form price effects of capacity constraints we find that pipeline congestion increased realized citygate prices by at least 11 over the mean in florida and by 6 over the mean in southern california we attribute the difference in price effects to more binding capacity constraints in the florida pipeline network our estimates provide guidance for interstate pipeline investments

competition in gas markets abstract this paper discusses some of the current regulatory issues that arise in gas markets under perfect or imperfect competition it first presents a benchmark model of gas transportation pricing when all markets are competitive optimal prices and capacities are characterized both without and with a break even constraint for the transportation operator elaborating on this framework it then studies the appropriate dimensioning of the transportation network when an otherwise unregulated supplier exerts market power specifically it points to the possibility of building up excess transmission capacity in order to mitigate local market power

defining spatial housing submarkets exploring the case for expert delineated boundaries although there are numerous reasons for real estate analysts to construct spatial housing submarkets there is little clarity about how this might best be done in practice the existing literature offers a variety of techniques including those based on principal components analysis cluster analysis and a range of other statistical procedures this paper asks whether given their market expertise and their role in disseminating information shaping search patterns and informing bid formation real estate agents might offer an effective but less data intensive method of submarket construction the empirical research is based on an experiment that compares the predictive of different sets of submarket boundaries constructed by using either standard statistical methods or through consultation with real estate agents and other market analysts the analysis draws on housing transactions data from istanbul turkey while the results do not demonstrate the outright superiority of any single method they do suggest that expert defined boundaries tend to perform at least as well as alternative construction techniques importantly the results suggest that agent based methods for delineating submarket boundaries might be used with a degree of confidence by real estate analysts and planners in market contexts where rich micro datasets are not readily available this has been one of the constraints internationally on wider adoption of submarket boundaries as an analytical tool

what drives natural gas prices a structural var approach abstract in this study we develop a structural vector autoregressive model var for the german natural gas market our setup allows us to analyze the determinants of the natural gas price in a comprehensive framework in particular we illustrate the usefulness of our approach by disentangling the effects of different fundamental influences on gas prices during three recent supply interruptions the russian ukrainian gas dispute of january 2009 the libyan civil war in 2011 and the withheld russian exports in february 2012 our results show that the natural gas price is affected by temperature storage and supply shortfalls in the short term while the long term development is closely tied to both crude oil and coal prices capturing the economic climate and the substitution relationship between the different energy commodities

a bayesian approach to assessing the robustness of hedonic property value studies hedonic price models are widely employed to estimate implicit prices for bundled attributes residential property value studies dominate these applications using a representative cross sectional property value data set we employ bayesian methods to translate a range of priors in covariate selection typical of hedonic property value studies into a range of posterior estimates we also formulate priors regarding measurement error in individual covariates and compute the ranges of resulting posterior means finally we empirically demonstrate that a greater and more systematic use of prior information drawn from one s own data and from other studies can break the collinearity deadlock in this data

nonconvex equilibrium models for gas market analysis failure of standard techniques and alternative modeling approaches abstract this paper provides a first approach to assess gas market interaction on a network with nonconvex flow models in the simplest possible setup that adequately reflects gas transport and market interaction we elaborate on the relation of the solution of a simultaneous competitive gas market game its corresponding mixed nonlinear complementarity problem mncp and a first best benchmark we provide conditions under which the solution of the simultaneous game is also the solution of the corresponding mncp however equilibria cannot be determined by the mncp as the transmission system operator s tso s first order conditions are insufficient which goes back to nonconvexities of the gas flow model this also implies that the welfare maximization problem may have multiple solutions that sometimes do not even coincide with any of the market equilibria our analysis shows that even in the absence of strategic firms market interaction fails to implement desirable outcomes from a welfare perspective due to the tso s incentive structure we conclude that the technical environment calls for a market design that commits the tso to a welfare objective through regulation and propose a design where the market solution corresponds to a welfare maximum and vice versa

british planning policy and access to housing some empirical estimates there is evidence that the implementation of the planning system creates scarcity rents for land in different uses by acting as a constraint on land supply this paper provides for 1984 estimat

economics and underdetermination a case study of urban land and housing economics underdetermination associated with the duhem quine thesis is a familiar if under researched theme in economics in the light of this we examine the development of urban land and housing economics through its cartesian dualistic delineation of theory and data the contemporary mainstream approach appears unable to circumvent the problem of underdetermination in effect it employs the strong version of duhem quine in its retention of the assumption of a single unitary competitive market and associated access space trade off conversely we highlight the affinity of ely s and the later columbia school s approach to pragmatists dewey and peirce which provides a more fruitful basis for explanation

spatial variation in office rents within the atlanta region hedonic office rent models are estimated using data for atlanta that span the years 1990 96 controlling for typical building characteristics and lease terms we find that variables measuring locational differences in wage rates transport rates and proximity to concentrations of support services and office workers play an important role in explaining spatial variation in office rents no evidence is found in support of the hypothesis that technological advances in telecommunications have diminished the role played by face to face agglomeration economies in determining the intra metropolitan location of office firms

forecasting housing prices under different market segmentation assumptions three types of market segmentation strategies are available to estimate hedonic housing price models i e no segmentation segmentation by using statistical clustering methods and segmentation by using a priori information this research tests the hypothesis of tiebout theory that individual residential decision making is determined by equilibrium provision of local public goods in accord with the tastes and preferences of residents thereby sorting their housing locations into optimal sub markets forecasting accuracies of eight sub market segmentation strategies and two forecast combining methods are examined by using housing sales data from knox county tennessee usa the results provide empirical support for tiebout theory of optimal housing sub market location in that boundaries drawn using a priori information from local government jurisdictions school districts and expert opinions are more closely aligned with the equilibrium provision of local public goods than boundaries drawn by statistical cl

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

open access and the evolution of the u s spot market for natural gas federal regulations promoting open access transportation dramatically altered the organizational structure of the u s market for natural gas in the 1980s generally unbundling the merchant and transport functions of interstate pipelines an empirical analysis of wellhead spot prices is undertaken to examine the effect of open access on the geographic scope of the spot market using monthly spot price data from 1984 91 three statistical tests are applied and compared price correlations granger causality and cointegration we find that open access integrated the regional wellhead markets into a national competitive market for natural gas the effects of unbundling on contracts for natural gas are then investigated incentives for long term contracts between pipelines and producers are shown to be effectively removed by the introduction of competitive buying and selling of gas at the wellhead through open access

tiered housing markets and their relationship to labour market areas this paper develops a tiered geography of local housing market areas hmas that provides a national framework for spatial planning it is derived from a theoretical understanding of the economic basis of hmas the analysis explores the relationships between the tiers of the hma geography and local labour market areas drawing on this understanding the empirical research generates sets of different potential geographies of hmas for england based on an algorithm that applies criteria linked to the degree of closure of migration and or commuting patterns a range of theoretically appropriate criteria then enable the different geographies to be assessed the choice of geography is guided by chow tests of statistical differences in standardised house prices in neighbouring hmas derived from hedonic regressions finally conclusions are drawn on the validity of the approach developed the empirical work is on england and datasets drawn from the census and land registry