do high taxes lock in capital gains evidence from a dual income tax system the purpose of this paper is to study whether investors willingness to realize capital gains falls when the marginal tax rate on capital gains is raised we use a rich register based panel data set covering almost 8 of the swedish population the results indicate that a 10 increase in capital gains tax rate reduces the number of realizations of capital gains with 8 7 and the realized amount given the decision to realize with 1 9 in addition we find that wealthy individuals seem to respond more to changes in capital gains tax rates than less wealthy

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

partial identification of amenity demand functions this paper presents a new hedonic framework for reduced form estimation of the demand for spatially delineated nonmarket amenities we begin from a conventional model of market equilibrium where an amenity is conveyed to homeowners by virtue of their residential location choices different housing markets may have different hedonic price functions due to variation across markets in the joint distribution of preferences income regulations and technology in this setting taste based sorting within and across markets confounds point identification of reduced form descriptions for amenity demand curves however we demonstrate that basic knowledge of the sorting process is sufficient to construct instruments that identify bounds on demand curves bounds on demand curves can be translated into ranges of welfare measures for non marginal changes in amenities we find these ranges to be potentially informative in a demonstrative application to evaluating the benefits of improved lake water clarity in the northeast

benefit transfer a comparison of wtp for air quality between france and germany a contingent valuation study was carried out under similar conditions on two sites simultaneously strasbourg france and kehl germany in order to test the reliability of the benefit transfer method on average the air quality is approximately the same in the two cities using a transfer of the benefit function we compared the direct estimated benefits from improved air quality with the transferred benefits in the same city the originality of this test is that the valued good is the same in both cities which means that the transfer is an intra site transfer however our findings show that the method of benefit transfer was not generally valid indeed inhabitants of kehl declared a higher price for their state of health and air quality than inhabitants in strasbourg this result could be explained by a stronger sensitivity to environmental problems in germany

hedonic price estimation of variable urban air quality abstract this paper investigates the validity of the hypothesis that the appropriate specification of the hedonic function should use mean levels of environmental quality a test of the mean specification is constructed by estimating a hedonic equation with the probabilities of various levels of environmental quality entered as independent variables the test indicates rejection of the mean specification the results imply that benefit estimates based on the traditional mean model are likely to be biased and that efforts to improve the accuracy of hedonic methods should consider more complete measures of environmental quality

identification of strategies to improve goat marketing in the lowlands of ethiopia a hedonic price analysis abstractthis article aims at identifying factors that determine market prices of goats and analyse potential mechanisms by which smallholder goat producers could maximize their benefits data on 35

monte carlo benchmarks for discrete response valuation methods this paper argues that the belief that discrete contingent valuation cv questions yield substantially larger estimates of the mean and the median willingness to pay wtp for nonmarket resources in comparison to open ended cv questions is unfounded monte carlo experiments estimate the factors influencing the performance of wtp estimates based on discrete response models most of the error arises from the specification errors common to the empirical models in the literature these experiments suggest models where wtp is dominated by nonuse or passive use values are likely to have smaller errors than where large use values influence these decisions

the use and abuse of meta analysis in environmental and natural resource economics an assessment motivated by the 2006 report of a work group appointed by the environmental protection agency epa this paper examines the present state of meta analysis in environmental economics and offers recommendations for its future use to this end we summarize and assess 140 meta analyses from 125 published and unpublished studies covering 17 topical categories in environmental and resource economics first we provide several generic meta analysis models as reference points and discuss major estimation issues five econometric issues are identified as part of a complete analysis 1 sample selection criteria 2 basic data summary 3 primary data heterogeneity 4 heteroskedasticity and 5 non independence of multiple observations from primary studies second a tabular summary is presented for the 140 meta analyses with respect to estimation methods third a narrative summary is presented for 19 meta analyses including the three value of statistical life studies examined by the epa work group and one analysis from each of 16 other categories fourth we offer a set of best practice guidelines for future meta analyses in this and other areas of economics last the paper comments on the use of meta analytic methods for benefit transfers of environmental values

the significance of quality differences for the united states and canada wheat trade some insights are provided as to why the united states the fifth largest wheat producer in the world imports a significant amount of wheat from canada after reviewing intra industry trade theory and the relevant empirical constructs an implicit price function of the import demand for wheat focusing on the physical and intrinsic characteristics of wheat is estimated the results are revealing there is a premium for the protein content and the percentage of heat damaged kernels in wheat clearly the fact that wheat is a differentiated commodity possessing a mix of physical and intrinsic characteristics together with price considerations helps to explain why the import of canadian wheat by the united states exists and why this became a significant issue in 1993

is what you see what you get the value of natural landscape views views of natural areas and green space may have value quite apart from access to those lands using 25 years of home sales data from st louis county missouri and modern geographic information system tools to measure views we estimate a hedonic property fixed effects model that captures the effects of changing land cover on house sale prices unlike previous studies our approach minimizes bias from omitted variables and uniquely captures changes over time we find that forest views negatively affect home prices whereas farmland views have positive effects changes in relative scarcity of these land types over time may explain the findings

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

paying for quietness the impact of noise on geneva rents using the hedonic approach this paper analyses housing market data to infer the impact of noise on rents in geneva switzerland using three different databases including a geographical information system gis structural accessibility and environmental variables were obtained for a large proportion of apartments rented in geneva the paper is thus in line with the new generation hedonic models which exploit the vast potential of gis to obtain large databases including detailed characteristics of the apartments in addition different and original measures of noise were used in order to assess possible differences of the noise impact on rents while existing studies typically refer to a single noise index this paper assesses the impacts of noise related to all sources but also to airport noise only while existing studies usually refer to road or aircraft noise the results can be summarised as follows first it is shown that the impact of all sources of noise on rents at the level of the whole ca

promise scholarship programs as place making policy evidence from school enrollment and housing prices abstract place based promise scholarship programs which guarantee financial aid for qualifying graduates of a school district have proliferated in recent years using data from multiple sites we compare the evolution of school enrollment and residential real estate prices around program announcement dates within promise eligible and surrounding areas while our estimates indicate that enrollment increased following promise announcements merit based programs generated relative increases in white enrollment housing prices respond strongly in neighborhoods with better primary schools and in the upper half of the housing price distribution we conclude that these programs have important and under studied distributional considerations

market power in a gis based hedonic price model of local farmland markets buyers of farmland are usually interested in parcels for sale that are close to their own farms with a limited number of parcels for sale this may lead to market power in local farmland markets the objective of this paper is to investigate whether market power affects farmland prices hedonic price models are adapted to allow for local market power of either sellers or buyers a distinction is made between rural and urban farmland markets the results provide evidence of market power effects in rural farmland markets however for farmland in urban areas market prices are dominated by speculation effects

the ex ante impact of conflict over infrastructure settings on residential property values the case of paris s suburban zones the presence of nearby public facilities has an impact on real estate values for this reason the market may reasonably anticipate that public infrastructure projects will affect house prices but undesirable and semi desirable facility location choices may be contested by nearby residents as they are a source of negative externalities or expectations in paris s suburban zones opposition to these infrastructures is frequent and the official announcement of a project does not automatically mean it will be implemented through three case studies we explore the way in which the expectation mechanism is affected by legal conflicts driven by nearby residents we suppose that expectations depend on the probability that a given project will be realised the variation is captured by a hedonic model as conflicts amplify or reduce the certainty of the new facility s arrival market perceptions of the infrastructure vary

the value of water as an urban club good a matching approach to community provided lakes abstract community provided urban lakes located in arid environments provide significant amenities to residents but require large quantities of water to maintain lake levels we use matching techniques to recover the average capitalized value of lakes above the costs of maintenance by comparing transactions in lake communities to observationally similar transactions in surrounding communities we differentiate between adjacent and non adjacent houses to recover heterogeneous treatment effects and allow estimates to vary across communities importantly we consider the role of imperfect matching on spatially and temporally varying unobservable variables in our choice of estimator and the appropriate set of potential control properties our results suggest that the capitalized value of lakes is heterogeneous with a mean estimate of 6500 an acre foot our results provide estimates of the changes in water prices that would make this form of development unprofitable illustrating the linkage between water pricing policy and the water intensity of development

a partisan model of government expenditure partisan models of budget politics largely concentrate on the size of government budget deficits and debt but most theories have little to say as to what the effect of party politics on both the size and the composition of budgets is this paper seeks to extend previous literature in two directions first a model of spending preferences is developed that relates actors preferred level and allocation of expenditure to electoral gains from fiscal policies second changes in both total expenditure and the expenditure mix of two budget categories are analyzed for the effect of parties spending preferences as stated in their election manifestos using data on 19 oecd countries from 1971 to 1999 the paper finds support for general partisan hypothesis the results suggest that the actual spending preferences of parties matter whereas they do not indicate that parties of the left consistently differ from parties of the right in their spending behavior

measuring permanent responses to capital gains tax changes in panel data the authors use panel data and information about differences in state tax rates to separate the effects of transitory and permanent tax rate changes on capital gains realizations behavior the estimated effect of permanent change is substantially smaller than the effect of transitory change the difference is even larger than differences between estimates from past micro data studies which have primarily measured the transitory effect and time series studies which have primarily measured the permanent effect the authors results resolve a long standing conflict between micro data and time series studies of how marginal tax rates affect capital gains realizations behavior copyright 1994 by american economic association

the effects of taxation on the selling of corporate stock and the realization of capital gains this study provides the first econometric analysis of the effect of taxation on the realization of capital gains the analysis thus extends and complements the earlier study by feldstein and yitzhaki 1978 of the effect of taxation on the selling of corporate stock the present analysis using a large new body of data obtained from individual tax returns supports the earlier finding that corporate stock sales are quite sensitive to tax rates and then shows that the effect on the realization of capital gains is even stronger

is meta analysis a noah s ark for non market valuation this paper describes meta analytical methods as they have been applied to non market valuation research these studies have been used to review and synthesize literature and more recently in benefit transfer this second use imposes a higher standard on the consistency in economic concepts being summarized and in the resources included in a meta analysis to meet this need the paper proposes and illustrates a structural framework using a generalized method of moments estimator to estimate the parameters of a preference function with the benefits estimates usually encountered in meta analytic summaries

capital gains realizations of the rich and sophisticated this paper attempts to bring theoretical and empirical research on capital gains realization behavior closer together by considering whether investors who appear to engage more in strategic tax avoidance activity also respond differently to tax rates we find that such investors exhibit significantly smaller responses to permanent tax rate changes than other investors put another way a larger part of their response to capital gains tax rates reflects timing consistent with their closer adherence to tax avoidance strategies emphasizing arbitrage based on tax rate differentials this finding holds for two alternative specifications of realization behavior one of which suggests larger permanent responses to capital gains tax rates than those of previous panel studies this abstract was borrowed from another version of this item

the rationality and price effects of u s department of agriculture forecasts of oranges this article examines the effect of public information on the orange juice market we investigate the rationality information content and price effects of u s department of agriculture forecasts of the production of oranges u s department of agriculture forecasts are found to be unbiased and efficient the first forecast contains the most new information and subsequent reports become valuable only when freezes occur significant price movements occur in response to announced production in both florida and california however the majority of price variations cannot be explained by these movements in supply

heteroscedastic hedonic price model for cattle in the rural markets of central ethiopia this study employs a heteroscedastic hedonic price model to examine the factors that influence cattle prices in the rural markets of central ethiopia the empirical results show that season market location class of cattle body size and age are very important determinants of the cattle price the relative weight of the phenotypic characteristics of the animals is among the highest of all the factors considered these preferences at the farmers and farmer traders levels are the ones that matter most in shaping the diversity of animals kept at farm level and the diversity of cattle genetic resources is quite essential for generating or identifying the best suited breeds of cattle given the livelihood objectives of the target community

supply fundamentals and grain futures price movements a long standing puzzle in commodity markets is the low explanatory power of supply and demand fundamentals for explaining the variability of prices in these markets we apply an instrumental variable correction for measurement errors to investigate how noise in the surprise component of usda crop production reports affects estimated price responses in corn soybeans and wheat futures markets from 1970 to 2016 our findings demonstrate that after correcting for measurement error in market surprises the explanatory power of our models increases about threefold and often exceeds 70 this is compelling evidence that fundamental supply news play an important role in explaining grain futures price movements

signals or noise explaining the variation in recreation benefit estimates this paper uses meta analysis to summarize the benefit estimates derived from travel cost recreation demand models after reviewing approximately 200 published and unpublished studies prepared from 1970 to 1986 77 were found to report either consumer surplus estimates or sufficient information to derive them using these estimates of the consumer surplus per unit of use from each study it was possible to evaluate the influence of variables describing the site characteristics the activities undertaken at each site the behavioral assumptions and the specification decisions the findings provide clear support for using econometric methods to summarize results from diverse empirical studies they highlight the important research issues in model development and offer a consistency check to the procedures used in benefit transfer analyses for policy evaluations

the market valuation of the fgis grain quality characteristics the issue addressed in this paper is whether the grain quality factors used by the federal grain inspection service in determining the quality grades of wheat exported by the united states including test weight dockage moisture content percentage of foreign material percentage of shrunken and broken kernels and protein content are characteristics that influence the price of wheat for export using shiplot data on the transactions price for hard red winter wheat hard red spring wheat and soft white wheat and the associated quality characteristics covering the period january 1990 to october 1991 and exported to 63 countires the results suggest that only the test weight and the protein content are characteristics consistently valued by the market

hedonic regressions mis specification and neural networks there is an emerging literature in the field of hedonic regressions which successfully applies flexible functional forms in contrast numerous authors report hedonic regressions with relatively simple functions often with little or no attempt to consider interaction terms and higher level powers such simple functions perform relatively well in spite of good a priori grounds for quite complex interaction effects indeed the studies are characterised by a general indifference to testing these more flexible models even when degrees of freedom permit using detailed scanner data hedonic functions for the uk tv market are estimated and tested for interaction effects for a case study of the market higher level interaction effects are tested for and compare the results with those from a neural network with its property of universal approximation the use of neural networks is particularly novel in this context and some general findings on their suitability emerge

redistributive taxation in a simple perfect foresight model abstract we investigate the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation first even unanticipated redistributive capital taxation is severely limited in its effectiveness since it depresses wages second under any convergent redistributive tax policy which maximizes a paretian social objective the capital income tax will converge to zero independent of the factor supply elasticities these results are independent of workers holdings of capital

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

which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities abstract the hedonic property value model is among our foremost tools for evaluating the economic consequences of policies that target the supply of local public goods environmental services and urban amenities we design a theoretically consistent and empirically realistic monte carlo study of whether omitted variables seriously undermine the method s ability to accurately identify economic values our results suggest that large gains in accuracy can be realized by moving from the standard linear specifications for the price function to a more flexible framework that uses a combination of spatial fixed effects quasi experimental identification and temporal controls for housing market adjustment

deriving benefit measures with higher precision a study of economic values of air quality a calibration strategy using ridge regression to generate more precise estimates for a particular parameter in a model is proposed formulae to compute the proposed ridge estimates from standard ordinary least squares ols results are provided the strategy is applied to recomputing marginal effects of air pollution on property values for 30 housing studies results show that ridge estimates are superior to the ols estimates under the mean squared error criterion the same strategy can be used to reestimate key parameters of interest in other applications such as price elasticities for demand forecasts or the value of a statistical life from hedonic wage regressions

capital gains taxation and realizations evidence from interstate comparisons this paper documents the interstate variation in capital gains taxation and examines the relation between the marginal tax rate on capital gains and aggregated state level realizations between 1979 and 1990 using state level aggregated data rather than data on individual taxpayers alleviates the problem that the marginal tax rate is endogenous to the amount of capital gains realized the estimated elasticity of realizations with respect to the tax rate is 0 65 smaller than that found by most researchers using panel data this finding is robust to a variety of alternative specifications copyright 1995 by mit press

forecasting with preliminary data a comparison of two methods this study examines two alternate methods a vector autoregression error correction model and a state space model to forecast revised united states trade balance figures both these methods incorporate preliminary and revised trade data the results obtained from these methods were compared to the benchmark forecasts generated by revised data only models this study finds that the state space model performs worse than the benchmark the vector autoregression model performs better than the benchmark only in the one step forecast these results indicate that incorporating preliminary data may not be useful in forecasting the revised data

linking the price of agricultural land to use values and amenities the recent appreciation in agricultural land values across the united states has raised a number of important questions for farmers farmland owners lenders and policy makers while traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns previous research has shown that agricultural land values are actually driven by a complex set of factors this study leverages the unique characteristics of a national land based usda survey on farmland values and cash rents to estimate broad national level determinants of the market value of cropland and pastureland our results support past research findings that indicate farmland values are only partially explained by agricultural returns we find that multiple nonagricultural attributes of farmland also contribute to the market value

new estimates of quality of life in urban areas implicit markets capture compensation for intraurban and interregional differe nces in amenities and yield differences in housing prices and wages these pecuniary differences become preference based weights in a qual ity of life index hedonic equations are estimated using microdata fr om the 1980 census and assembled county based amenity data on climati c environmental and urban conditions ranking of 253 urban counties reveals substantial variation within as well as among the 185 urba n areas the quality of life differences across counties within one s msa is almost one half of the difference between the top and bottom ranked counties in the nation copyright 1988 by american economic association

subdivision vintage and housing prices do home buyers value traditional development new urbanism and traditional neighbourhood development tnd have been championed as solutions to the problems associated with post war suburban sprawl however they have yet to capture a substantial share of the us housing market the market context for tnd is not well understood as the paucity of tnd makes it difficult to study directly this paper takes a novel approach by focusing on the market for traditional development itself defined as subdivisions recorded prior to world war ii in the sprawling tucson arizona msa the results of the hedonic analysis demonstrate that home buyers value the features embodied in traditional development as homes in subdivisions platted before 1940 command premiums over those in their modern counterparts even after carefully controlling for locational and structural characteristics moreover the analysis finds that the premiums have increased through time which suggests growing demand for traditionally designed subdivisions

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

hedonic markets and sorting equilibria bid function envelopes for public services and neighborhood amenities abstract hedonic regressions with house value as the dependent variable are widely used to study public services and neighborhood amenities this paper builds on the theory of household bidding and sorting across communities to derive bid function envelopes which provide a form for these regressions this approach allows for household heterogeneity and multiple amenities yields estimates of the price elasticity of amenity demand directly from the hedonic without a rosen two step procedure and provides tests of hypotheses about sorting an application to cleveland area data from 2000 yields price elasticities for school quality and neighborhood ethnic composition and supports the sorting hypotheses

the power to tax analytical foundations of a fiscal constitution preface 1 taxation in constitutional perspective 2 natural government a model of leviathan 3 constraints on base and rate structure 4 the taxation of commodities 5 taxation through time income taxes capital taxes and public debt 6 money creation and taxation 7 the disposition of public revenues 8 the domain of politics 9 open economy federalism and taxing authority 10 toward authentic tax reform prospects and prescriptions epilogue notes selected bibliography index

understanding the amenity impacts of wind development on an international border abstract wind energy developments are often controversial concerns are often raised about negative impacts on local communities including impacts on property values some of these negative impacts may be offset by compensatory payments made by wind developers community involvement in the planning and development process may also reduce negative perceptions associated with wind facilities however if the development is near a border between municipalities states or even countries it is often the case that one or more jurisdictions will not be involved in the process or receive compensation but will nonetheless face some costs or impacts from the development we explore exactly this situation at the border between canada and the united states in the thousand islands region where a wind farm is currently operating on the canadian border island of wolfe island using a parcel level hedonic analysis of property sales transactions we find that properties in new york with a view of and or in close proximity to the turbines significantly depreciated in value after construction of the turbines while no negative impacts were observed on properties in ontario we highlight a number of factors that could contribute to these differences in impacts on property values which may also explain the variation in results that currently exists in the literature

hedonic housing price indices and secondary employment centers the monocentric model of the city concludes that the price of housing services varies inversely with travel time to the central business district cbd holding location specific amenities constant because households lower their bid prices for housing as commutation cost increases indeed residential locational equilibrium in the monocentric city requires a negative price gradient however empirical testing has revealed at best lukewarm support for the negative price gradient 2 for example estimates of hedonic housing price indices by berry 3 and daniels 4 yield statistically significant positive relationships between price and distance or travel time to the cbd while kain and quigley 6 lapham 7 and thaler 14 find no statistically significant relationship the lack of consistent empirical support for a monotonically negative price gradient need not be disturbing if the city violates the assumptions of the monocentric city model specifically secondary employment centers could cause the price gradient from the cbd eventually to become positive and achieve a local maximum in the neighborhood of the secondary center failure to control for distance or travel time to secondary centers may explain positive and statistically insignificant negative price gradients that

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

permanent versus transitory tax effects and the realization of capital gains recent empirical work on captial gains implies that realizations are highly sensitive to marginal tax rates because they are based on cross section data however these estimates cannot distinguish between permanent responses to tax rate changes and the timing of realizations to take advantage of the normal fluctuations in any individual s tax rates over time the purpose of this paper is to distinguish transitory from permanent tax effects by analyzing panel data for taxpayers controlling for permanent and transitory income and other variables the estimates suggest both transitory and permanent effects although the permanent tax rate effect is not significant in all cases

the value of public information in commodity futures markets abstract the informational value of u s department of agriculture usda corn and soybean production forecasts is investigated for the period 1971 1992 three tests of informational content are applied overall the results suggest usda corn and soybean forecasts provide valuable information to participants in commodity futures markets this value does appear to have declined especially since the mid 1980s

environmental value transfer state of the art and future prospects abstract the main objectives of the paper are to 1 give an overview of the state of the art of environmental value transfer 2 discuss its prospects and potential role in cba as a decision support tool and 3 provide further guidelines for proper use and application environmental value or benefit transfer is a technique in which the results of studies on monetary environmental valuation are applied to new policy contexts the technique is controversial not least because of academic and political reservations over the usefulness and technical feasibility of economic valuation tools to demonstrate the importance of environmental values in project or programme appraisals testing of environmental value transfer so far has been unable to validate the practice taking into account the conditions set out in the literature for valid and reliable value transfer most transfers appear to result in substantial transfer errors this paper discusses why and addresses the question of which factors may have been overlooked it is argued that the problem is much more fundamental than previously acknowledged strict guidelines in terms of quantitative adjustment mechanisms to valid value transfer are meaningless if the more fundamental issue of differences in the very nature of the values elicited is not addressed at the same time

quantifying the wasde announcement effect this article uses a two stage gls model to quantify the world agricultural supply and demand estimates wasde announcement effect for cotton soybeans and hard winter wheat controlling for important factors associated with commodity price volatility the information presented by the overlapping nature of futures contracts is exploited to estimate conditional effects by month inventory conditions and delivery horizon results in this article show that the wasde announcement effect persists across contract positions is not limited to months that include nass crop survey data is amplified during low carryover periods for soybeans and wheat and is rapidly incorporated into futures prices

economic valuation of biodiversity a comparative study abstract in recent years an intensive debate on the economic valuation of biodiversity has entered the environmental economics literature the present paper seeks to offer first a critical review of key concepts that are essential for a proper understanding of such evaluation issues particular attention is given here to various monetary valuation approaches and to comparative i e meta analytical methods from the perspective of conservation and sustainable use of biodiversity several illustrative examples are presented in order to highlight the usefulness of the various approaches discussed next an attempt is made to infer general findings and lessons from past applied research by means of meta analysis in this context a multi dimensional technique originating from the field of artificial intelligence is deployed it allows us to identify the most important variables responsible for changes in economic estimates of biodiversity

directional heterogeneity of environmental disamenities the impact of crematory operations on adjacent residential values a hedonic study of residential house sales in rawlins wyoming was conducted to estimate the impact of an environmental shock from a new point source upon adjacent residential property values we use a unique data base of house sale prices and associated house attributes including structural and neighbourhood characteristics and geographic distances and directions from the source of the shock atmospheric emissions from a new crematory our data spans 27 months of house sales 7 months before and 20 months after the startup of crematory operations results indicate that proximity measured both in terms of direction and distance from the crematory imparts a statistically significant negative impact on average house sale prices an increase of 0 3 to 3 6 of average sale price for every one tenth mile increase up to one half mile in distance away from the crematory but depending on direction from the crematory this distance benefit increases somewhat with calendar time only for houses located west of

an embarrassment of riches confronting omitted variable bias and multiscale capitalization in hedonic price models abstract many researchers have addressed concerns of omitted variable bias in hedonic price models through the use of spatial fixed effects we argue that this approach does not consider the biases introduced by effects that overlap the zone of capitalization for nonmarket goods we show this bias can dominate the usual omitted variable bias using data on developer provided open space we control for multiscale capitalization and omitted variables simultaneously by extending the hausman taylor estimator where the panel component of the estimator is defined over repeated transactions within neighborhoods rather than the traditional definition following a unique cross sectional unit through time

taste or reputation what drives market prices in the wine industry estimation of a hedonic model for italian premium wines the aim of this article is to provide new evidence on the factors affecting wine prices on both methodological and factual grounds on the methodological ground this study is the first to apply a general box cox transformation within the context of hedonic models which exploit all the variables objective and sensorial characteristics reputation pointed out by previous literature as relevant in driving market prices on the factual ground the article fills the lack of empirical evidence on the issue for italy one of the leading wine producers by using a large data set on two premium quality wines barolo and barbaresco covering the 1995 1998 vintages our results support the evidence obtained using data from other countries showing that sensorial traits the reputation of wines and producers as well as objective variables are all important factors influencing the consumers willingness to pay more importantly by resorting to a nonnested statistical test vuong 1989 we compare two alternative

estimating the effect of air quality spatial versus traditional hedonic price models author affiliation helen r neill department of environmental studies greenspun college of urban affairs university of nevada las vegas 4505 maryland parkway box 454030 las vegas nv 89154 4030 usa helen neill unlv edu corresponding authordavid m hassenzahl department of environmental studies greenspun college of urban affairs university of nevada las vegas 4505 maryland parkway box 454030 las vegas nv 89154 4030 usa david hassenzahl unlv edudjeto d assane department of economics college of business university of nevada las vegas 4505 maryland parkway box 456006 las vegas nv 89154 6006 usa djeto assane unlv edu acknowledgment the authors are grateful to the editor and two anonymous referees for valuable comments the authors wish to thank ms debra march director of the lied real estate institute at the university of nevada las vegas for supporting this research project with real estate data and mr russ merle senior planner from clark county for providing air quality data the views expressed in this paper do not necessarily reflect those of the lied real estate institute and clark county government the authors are responsible for any possible errors 1 introductiontraditionally ordinary least squares ols methods have been used for hedonic modeling ols has the advantage that it can be applied to large data sets it is limited however by its inability to account for spatial autocorrelation for example geostatistical approaches using maximum likelihood estimation mle can account for spatial autocorrelation but in turn are limited by current computing techniques to relatively small data sets i e sets of 1000 or fewer depending on the complexity of the model and number of variables consequently for large data sets modelers must either use ols and be hampered by inadequately specified estimates of relatively low significance or apply mle techniques to a sample of the data set these shortcomings suggest two major research questions the first question which is central to this paper relates to the robustness of competing methods of estimation here we contribute a method for estimating and predicting hedonic price models while controlling for spatial dependence of proximal homes the other question of general interest deals with the usefulness or validity of hedonic modeling for environmental characteristics that is the importance of air quality in explaining sales price of homes in order to evaluate these two questions we propose and test an approach that uses a block bootstrap method to account for spatial dependence in the data our two step procedure consists of first creating blocks of temporal and spatial information within a larger data set of home sales prices and then implementing the bootstrap by resampling from each block next we apply ols and geostatistical mle estimation techniques to generate and store coefficient estimates for each resample the stored sets of resamples then represent monte carlo simulations of the full data set for each of the estimation techniques these can be compared to evaluate the robustness of the methods based on their respective predictive powers our findings may be summarized as follows we find that the geostatistical mle method which accounts for spatial effects outperforms the traditional ols method in several ways theoretically the geostatistical mle method better represents the expected spatial autocorrelation between error terms empirically this method provides better results with respect to expected signs statistical significance and predictive power the block bootstrapping technique allows hedonic modelers to effectively address spatial autocorrelation for large data sets overall we find that under these simulated conditions measured air quality matters for our data set regardless of the method used the remainder of this paper contains five sections

cross base tax elasticity of capital gains abstractthis paper studies the cross base tax elasticity of capital gains realizations to labour income taxes when capital gains are taxed at a separate proportional tax rate using a longitudinal panel of over 265 000 individuals in sweden this paper shows in a regression kink design that labour income taxes affect capital gains realizations in two ways an increase in the marginal labour income tax rate increases the likelihood of realizing capital gains and the amount of realized capital gains one implication of this result is that labour income taxes have a lock out effect but that the magnitude of this effect is smaller than the lock in effect of the actual capital gains tax

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

environmental amenities as a source of market power site specific environmental amenities can provide a source of product differentiating market power using estimates from hedonic price equations and residual demand models our analysis recovers firm specific estimates of price markups as measures of market power and uses these markups to estimate the implied marginal value for access to coastal beaches the application involves rental price and occupancy data for several thousand beach properties along a portion of the north carolina coastline during the 1987 to 1992 rental seasons

valuation of pollution abatement benefits direct and indirect measurement abstract this paper deals with the valuation of benefits especially morbidity reduction associated with air pollution abatement two approaches are employed these are direct contingent valuation as gauged by willingness to pay and indirect valuation through the effect of changes in the provision of a public good clean air upon the demand for two market goods housing and medical services both empirical analyses are based on the same set of individuals from a sample survey of households in the city of haifa in israel this strategy enabled the derivation of comparable individual valuations the paper then proceeds to compare and evaluate the estimates of welfare changes obtained under these two distinct approaches

valuing morbidity an integration of the willingness to pay and health status index literatures placing dollar values on human health has long been a controversial aspect of policy analysis and remains difficult given the relatively small number of morbidity valuation studies available by combining both the economic and health literature this paper offers an alternative approach to morbidity valuation and provides estimates for a wide range of short term health conditions

policy watch cutting capital gains taxes from 1922 to 1986 long term capital gains were taxed at lower rates than other income generally by allowing a portion of long term capital gains to be excluded from taxable income while taxing capital gains at the same rates as other income has been hailed by some as a major accomplishment of tax reform it has been criticized by others as one of its main flaws as a result there have been proposals each year since 1986 to restore some type of capital gains preference these proposals have sparked a lively debate centered on three main questions would reducing the capital gains tax lower or raise federal revenues who benefits most from cutting the capital gains tax would lower tax rates on capital gains improve economic performance

heterogeneity in price rigidity evidence from a case study using microlevel data we combine two data sets to study price rigidity the first consists of weekly time series of retail wholesale and spot prices for twelve products these time series contain two exogenous cost shocks we find that prices exhibit more rigidity in response to the second shock than the first the second data set consists of all publicly available information about the shocks content analysis of these information reveals that the first shock is larger and more persistent and the market has more information on it than the second we conclude therefore that prices are more flexible in response to cost shocks that are larger that are more persistent and on which market participants have more information

hedonic valuation of odor nuisance using field measurements a case study of an animal waste processing facility in flanders in this paper we estimate the external cost caused by odor from an animal waste processing facility in flanders using new odor measures based on field measurements we compare three different ways of incorporating odor nuisance indicators into the model distance to the odor source continuous odor measures and a dummy variable approach comparable to the standard procedure in hedonic price analysis of noise pollution we argue that the dummy variable approach is best suited to estimate the external costs and we test these specifications for a dataset of about 1400 observations of house sales transaction between 2004 and 2008 results show that houses subject to moderate and severe odor nuisance sell at a discount of about 5 and 12 respectively compared to houses without odor nuisance the overall capitalized external cost of the odor exposure for the area of the case study was estimated to range between 6 and 56 million euro with a central estimate of about 31 million euro this estimate proves to be very stable over different model specifications compared to 1991 the external cost has almost been cut by half as a result of odor emission reducing measures taken by the facility

price flexibility in channels of distribution evidence from scanner data in this study we empirically examine the extent of price rigidity using a unique store level time series data set consisting of i actual retail transaction prices ii actual wholesale transaction prices which represent both the retailers costs and the prices received by manufacturers and iii a measure of manufacturers costs for 12 goods in two widely used consumer product categories we simultaneously examine the extent of price rigidity for each of the 12 products at both final goods and intermediate goods levels we study two notions of price rigidity employed in the existing literature i the frequency of price changes and ii the response of prices to exogenous cost changes we find that retail prices exhibit remarkable flexibility in terms of both notions of price rigidity i e they change frequently and they seem to respond quickly and fully to cost changes furthermore we find that retail prices respond not just to their direct costs but also to the upstream manufacturers costs which further reinforces the extent of the retail price flexibility at the intermediate goods level of the market in contrast we find relatively more evidence of rigidity in the response of manufacturers prices to cost changes this despite the fact that wholesale prices change frequently and therefore exhibit flexibility according to the first notion of price rigidity

evaluating information in multiple horizon forecasts the doe s energy price forecasts abstract the united states department of energy s doe quarterly price forecasts for energy commodities are examined to determine the incremental information provided at the one through four quarter forecast horizons a direct test for determining information content at alternative forecast horizons developed by vuchelen and gutierrez vuchelen j and gutierrez m i a direct test of the information content of the oecd growth forecasts international journal of forecasting 21 2005 103 117 is used the results suggest that the doe s price forecasts for crude oil gasoline and diesel fuel do indeed provide incremental information out to three quarters ahead while natural gas and electricity forecasts are informative out to the four quarter horizon in contrast the doe s coal price forecasts at two three and four quarters ahead provide no incremental information beyond that provided for the one quarter horizon recommendations of how to use these results for making forecast adjustments is also provided

bequest taxes and capital gains realizations abstract contrary to popular view capital gains do not escape taxation at death as they are subject to the estate tax the presence of the step up in basis increases the lock in effect of capital gains taxes as individuals are induced to hold assets until death this effect however is mitigated by the estate tax which applies to assets passed to heirs using a sample of matched income and estate tax records in a period that straddles significant changes in capital gains and estate tax rates the estate tax is found to have an unlocking effect on capital gains realizations the realization elasticity with respect to the estate tax rate is estimated at 0 36 in the basic model

the impact of public and semi public information on cotton futures market abstractthis study estimated the impact of all major public and semi public reports on the cotton futures market from 1995 through 2012 the estimation was based on the event study approach with the events measured by the release of five major reports export sales crop progress world agricultural supply and demand estimates wasde and prospective plantings public reports from us department of agriculture and cotton this month semi public report from international cotton advisory committee the best fitting igarch 1 1 t model that accounted for the day of week seasonality and stock levels was used to measure the report effects on daily nearby cotton close to close futures returns prospective plantings and wasde reports appeared to be the most important sources of information in the cotton markets moving the conditional standard deviation of returns by an average of 14 4 and 9 6 percentage points respectively however significant market reaction was not found for the other three reports our an

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

optimal taxation of capital income in general equilibrium with infinite lives this paper analyzes the optimal tax on capital income in general equilibrium models of the second best agents have infinite lives and utility functions which are extensions from the koopmans form the population is heterogeneous the important property of the models is the equality between the social and the private discount rates in the long run i find that the optimal tax rate is zero in the long run for a special case of additively separable utility functions i then determine the tax rates along the dynamic path and conditions that are sufficient for the local stability of the steady state

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

the choice of functional form and variables in the hedonic price model in seoul this study demonstrates that the important part of exploring the proper functional form of the hedonic price model would include investigating a dissimilar and unique hedonic price structure when the hedonic price model is applied to different housing markets based on the adjustment to the usual technique necessitated by the regional and cultural setting of seoul the criteria for significance of implicit price root mean square percentage error and the log likelihood ratio test are applied to the choice of a useful functional form we conclude that investigating the structure of a local housing market and choosing proper variables reflecting regional and cultural characteristics both key parts of such a study require significant adjustment to the reality of seoul

hedonic models and air pollution twenty five years and counting this paper reports a meta analysis of how effectively hedonic property models have detected the influence of air pollution on housing prices probit estimates are reported describing how data model specification and local property market conditions in cities represented in thirty seven studies influence the ability of hedonic models to uncover negative statistically significant relationships between housing prices and air pollution measures