the housing market impacts of shale gas development using data from pennsylvania and an array of empirical techniques to control for confounding factors we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source well productivity and visibility results indicate large negative impacts on nearby groundwater dependent homes while piped water dependent homes exhibit smaller positive impacts suggesting benefits from lease payments results have implications for the debate over regulation of shale gas development jel l71 q35 q53 r31 technological improvements in the extraction of oil and natural gas from unconventional sources have transformed communities and landscapes and brought debate and controversy in the policy arena shale gas plays underlying the populated northeastern united states were thought to be uneconomical less than ten years ago but now contribute a major share of us gas supply 1 natural gas has been hailed as a bridge to energy independence and a clean future because of its domestic sourcing and compared with coal and petroleum derivatives its smaller carbon footprint and reduced emissions of other pollutants e g particulates sulfur dioxide car

entry order and pricing over the product cycle the transition from the 486 to the pentium processor abstract using a high frequency data set of advertized prices of personal computers we find that prices of pentium computers of late entrants into this market segment are higher than the contemporaneous prices of their competitors this is true even among firms which have the same price premium for their 486 computers but is more pronounced for high quality firms over time the difference in the pentium computer prices between the early and late entrants declines to the level of the price gap for their 486 computers in contrast the entry prices of the late entrants are lower than the entry prices of the early entrants these results suggest that entry prices of firms are set to extract short run rents from consumers who have a higher willingness to pay for their brand they also suggest a rapidly declining price premium for quality over the product cycle we develop a stylized two period durable goods duopoly model that formalizes this intuition and which produces results consistent with these empirical regularities in light of these findings brand coefficients in hedonic regressions using high frequency data should not be interpreted as capturing unobserved quality only

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

the segregative properties of endogenous jurisdiction formation with a land market this paper examines the segregative properties of tiebout like endogenous processes of jurisdiction formation in presence of a competitive land market in the model considered a continuum of households with different wealth levels and the same preferences for local public goods private spending and housing choose a location from a finite set each location has an initial endowment of housing that is priced competively and that belongs to absentee landlords each jurisdiction is also endowed with a specific technology for producing public goods households preferences are assumed to be homothetically separable between local public goods on the one hand and private spending and housing on the other public goods provision is financed by a given but unspecified mixture of linear wealth and housing taxes we show that stable jurisdiction structures are always segregated by wealth only if households view any public good conditionally on the quantities of the other public goods as either always a gross substitute or either always a gross complement to private spending we also show that if there are more than one public good this condition is not sufficient for segregation unless households preferences are additively separable since this condition is necessary and sufficient for the segregation of stable jurisdiction structures without land market and with only one public good our results suggests that introducing a land market does not affect the segregative properties of endogenous jurisdiction formation but that increasing the number of public goods mitigates segregation

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

the amenity cost of road noise this article reports a complete two stage hedonic analysis for road noise for the estimation of the hedonic price function i develop a spatial research design which simultaneously reduces the risk of omitted variable bias and the risk of measurement error in the noise measure the preference parameters are identified following the approach developed in bajari and benkard 2005 by using a simple functional form for utility preferences are very heterogeneous and observable demographic characteristics explain 30 percent of the variation in taste for quiet results are used to discuss willingness to pay for noise reductions from two policy measures

cost functions and nonlinear prices estimating a technology with quality differentiated inputs the paper is concerned with developing a production theory for the case when some inputs have nonlinear prices because the price depends on endogenous quality this involves extending the notion of a cost function to the case where nonlinear prices are parameters of costs after developing the appropriate theory we apply our results to the case of coal fired electric power generation where fuel quality depends on sulfur and ash impurities environmental regulations induce a negative value on sulfur whereas ash impurities degrade performance and thus reduce production possibilities a number of empirical results emerge including significant rates of technological change that are sulfur and ash saving though capital using this change may explain in part the recent drop in the price of sulfur allowances in the united states

forced information disclosure and the fallacy of transparency in markets a theory advanced in regulatory hearings holds that market performance will be improved if one side of the market is forced to publicly reveal preferences for example wholesale electricity producers claim that retail electricity consumers would pay lower prices if wholesale public utility demand is disclosed to producers experimental markets studied here featured decentralized privately negotiated contracts typical of the wholesale electricity markets two conclusions emerge i such markets generally converge to the competitive equilibrium and ii forced disclosure works to the disadvantage of the disclosing side information disclosure would result in higher wholesale and thus higher retail electricity prices

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

maximum score estimates of the determinants of residential mobility implications for the value of residential attachment and neighborhood amenities abstract this paper uses a semiparametric empirical technique maximum score to estimate the determinants of the decision of low income renters to move out of their dwelling the maximum score estimates prove to be far more precise than probit estimates the estimates are used to show that low income residents highly value remaining in their dwelling in addition these estimates are used to illustrate an alternative method to measure willingness to pay for neighborhood amenities which we argue to be superior to hedonic based wtp measures

a novel approach to identifying hedonic demand parameters abstract this note presents a new solution to the classic problem with using hedonic price functions to recover demand curves unexpected changes in the composition of a differentiated product can generate instruments that support a simple reduced form approach to demand estimation

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

willingness to pay for car safety evidence from sweden this study estimates a marginal willingness to pay wtp function for a road mortality risk reduction observed marginal wtp from the swedish car market is used and found to be positively correlated with the baseline risk of the cars no statistically significant relationships between examined owner attributes e g wealth and background risk and marginal wtp are found when comparing the estimated monetary value of a non marginal risk reduction derived from the integral of the marginal wtp function with an estimate based on marginal wtp we find in line with expectations that the difference between the estimates is negligible for smaller risk reductions and small 4 10 also for relatively large risk reductions

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

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

a household hedonic model of rice traits economic values from farmers in west africa abstract new crop varieties often have been promoted in developing countries based upon superior yield vis a vis locally available varieties this research presents a hedonic price model for upland rice by drawing upon the input characteristics and consumer good characteristics model literature model specification tests determine that a combination of production and consumption characteristics best explains the willingness to pay for new upland rice varieties the household model specification determined that five traits explain the willingness to pay for new rice varieties plant cycle length plant height grain colour elongation swelling and tenderness yield was not a significant explanatory variable of the willingness to pay for seed the implications of this model are two fold first varietal development and promotion must include post harvest characteristics in addition to production traits when determining which varieties to promote for official release secondly non yield production characteristics such as plant height and cycle length are significant factors in producer s assessments of the value of a new variety overall this paper provides an alternative explanation for limited adoption of modern upland rice varieties in west africa varietal evaluation programs have focused too narrowly on yield evaluation and have not promoted varieties with superior non yield characteristics than locally available varieties

estimating the marginal willingness to pay function without instrumental variables abstract the hedonic model of rosen 1974 has become a workhorse for valuing the characteristics of differentiated products despite a number of well documented econometric problems including a source of endogeneity that has proven difficult to overcome here we outline a simple likelihood based estimation approach for recovering the marginal willingness to pay function that avoids this endogeneity problem using this framework we find that marginal willingness to pay to avoid violent crime increases by sixteen cents with each additional incident per 100 000 residents accounting for the slope of the marginal willingness to pay function has significant impacts on welfare analyses

estimating the willingness to pay to avoid violent crime a dynamic approach the hedonic model which has been used extensively in the environmental urban and real estate literatures allows for the estimation of the implicit prices of housing and neighborhood attributes such as square footage local crime rates and school quality as well as households demand for these nonmarketed amenities a recognized drawback of the existing hedonic literature is that the models assume a myopic decision maker i e households do not look to the future when choosing where to live today in this paper we apply a dynamic hedonic model of demand to estimate the willingness to pay to avoid violent crime the existing literature based on sherwin rosen s seminal 1974 paper estimates households willingness to pay for a given amenity by taking advantage of the first order conditions for utility maximization i e by requiring that the marginal change in price associated with an increase in amenity consumption will be equal to the marginal utility associated with the increase given that these first order conditions are derived from a myopic utility maximization problem and not the maximization of a lifetime utility function the traditional model will yield unbiased estimates only under the assumption that households are not forward looking when they purchase a house considering the substantial transaction costs that are present in the real estate market both monetary and psychological this assumption is unlikely to hold in most real world applications bishop and murphy 2011 expand the existing hedonic framework by allowing households to be forward looking with respect to the amenities of interest in that paper the familiar

measuring the social value of local public goods an empirical analysis within paris metropolitan area a non linear hedonic model is used to estimate the implicit marginal prices of 17 local public goods in a paris suburban area on an original data set of some 8200 housing units the results reveal a robust effect of local public school quality measured both by the fraction of junior high school students that are at least two years behind grade level and the student teacher ratio on house prices it is observed that housing owners marginal willingness to pay for reducing commuting time is roughly similar for public transportation than for car transportation another noticeable result is the complete capitalization of local taxes at a discount rate of 3 5 an illustration of the potential usefulness of the results for cost benefit analysis is also provided

compensation for earnings risk under worker heterogeneity we use two large data sets to estimate the risk augmented mincer equation and test for risk compensation in expected earnings we replicate earlier findings of a positive premium for risk and a negative premium for skew and add confirmation of the key results if we control for individual ability we compare risk compensation and risk distributions between some labor market groups and find that immigrants and natives do not differ in risk attitudes that public sector workers are undercompensated for their risk and that risk compensation by gender is not fully consistent with higher risk aversion for women we express concern that a linear compensation model may be too simple

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

innovation and price the case of digital cameras this study examines a hedonic regression model of digital camera prices using data collected from an internet price comparison service we find that a small number of product characteristics explains most of the variation in camera prices in addition the model demonstrates substantial downward pressure on camera prices during the time period considered we also examine technological innovation shocks to determine their impact on product prices we find that the corresponding price reaction exhibits gradual adjustment over time providing evidence of some degree of anticipation of the innovation as well as a post innovation price shock this study also demonstrates the power of web based shopping services as a new and novel source of data for econometric analysis

panel data hedonics rosen s first stage as a sufficient statistic traditional cross sectional estimates of hedonic price functions can recover marginal willingness to pay for characteristics but face endogeneity problems for estimating non marginal welfare measures i show that when panel data on household demands are available one can construct a second order approximation to non marginal welfare measures using only the first stage marginal prices with repeated cross sections of product prices the measure can be set identified or under a single crossing restriction point identified bounds also can be constructed when there are mobility costs finally a variant remains valid when individual preferences shift over time

estimating british workers demand for safety this paper estimates workers demand function for job safety using the british general household survey data the estimation employs rosen s two stage procedure the main difference between our study and those done in the past is that we estimate hedonic price equations with data sets from two labour markets our approach overcomes the usual identification problems associated with the application of rosen s method the estimation shows that there is a significant wage compensation for job risk in the uk the willingness to pay for a 1 100 000 decrease of annual job fatal accident rate from our estimated workers demand function is about 6 in 1973 prices the estimation of a demand function for safety also enables the derivation of workers willingness to pay for non marginal change of job risk and this can be used for cost benefit analysis on projects involving such non marginal changes

hedonic onsight cost model of recreation demand for many recreational activities onsite pecuniary costs can be a significant portion of the cost of a recreational trip onsite expenditures however often depend upon endogenous quality choices made by the household we formulate a recreation demand model that formally accounts for household selection of quality of onsite time household behavior is constrained by income prices and the onsite hedonic price schedule assuming complete optimization a reduced form marshallian demand curve for recreation trips still results and a specialized version of roy s identity provides a basis for welfare analysis instrumenting for endogenous quality choices does not improve demand estimation

endogenous matching and the empirical determinants of contract form empirical work on contracts typically regresses contract choice on observed principal and agent characteristics if i some of these characteristics are unobserved or partially observed and ii there are incentives whereby particular types of agents end up contracting with particular types of principals estimated coefficients on the observed characteristics may be misleading we address this endogenous matching problem using a data set on agricultural contracts between landlords and tenants in early renaissance tuscany controlling for endogenous matching has an impact on parameters of interest and tenants risk aversion appears to have influenced contract choice

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

efficient estimation of the costs of rent controls a comment steven b caudill richard w ault and richard p saba 1989 introduce an approach to estimating a hedonic price equation that accounts for censoring d ue to rent control in a rental housing market this paper extends and clarifies their assertion on the consistency of the ordinary least squares estimates and their estimates the authors indicate how the nature of the rent control law affects the consistency propertie s of the two estimation methods copyright 1993 by mit press

a general equilibrium analysis of financial regulation abstract this paper utilizes a general equilibrium approach to investigate the factor returns and output effects on a regulated and unregulated sector from imposition of a rate of return on investment regulatory constraint the results differ from those of the traditional partial equilibrium model of the regulated firm as originally developed by averch and johnson aj the differences are explained by the fact that the general equilibrium approach assumes the existence of efficient capital markets whereas the aj approach does not introduction of the competitive capital market framework in the study of financial regulation through the general equilibrium methodology is this paper s major contribution

hedonic price functions and the measurement of preferences the case of swedish wine consumers abstract a hedonic price function for wine is estimated using swedish data 1989 1991 implicit prices for quality attributes are determined not from a regression of variety price on a vector of quality attributes but rather from a regression of quantity sold adjusted for weeks of availability on price and quality attributes such a reduced form is justified by the assumption that prices and attribute contents can be taken as exogenous to the swedish consumer price elasticity is estimated to be about 1 65 holding quality constant showing that swedish consumers are highly sensitive to price estimates of the implicit valuations of quality attributes are shown to differ greatly from those obtained from the more usual hedonic regression with price as the dependent variable

willingness to pay for ozone control inferences from the demand for medical care abstract the paper applies a discrete choice version of the household production approach to the valuation of nonmarket goods willingness to pay for tropospheric ozone control is estimated using medical care demand under assumptions of input necessity and weak complementarity in example calculations individuals living in high ozone areas are willing to pay over 170 annually for an environment in which ozone concentrations never exceed 12 pphm willingness to pay figures are two to four times larger than medical expense savings caused by the same ozone reductions estimates obtained are compared with results of previous studies and proposed ozone control measures are discussed

the changing dis utility of work we study how changes in the distribution of occupations have affected the aggregate non pecuniary costs and benefits of working the physical toll of work is less now than in 1950 with workers shifting away from occupations in which people report experiencing tiredness and pain the emotional consequences of the changing occupation distribution vary substantially across demographic groups work has become happier and more meaningful for women but more stressful and less meaningful for men these changes appear to be concentrated at lower education levels

compensating wage differentials for schooling risk in denmark in this paper we analyse the association between wage differentials and risk using detailed information on length and type of education as seen in danish administrative registers our contribution to the literature is that we distinguish between transitory time series and permanent cross sectional income shocks and estimate the compensation for both sorts of risk we find that wage risk in a given education cell is associated with higher wages while skewness is associated with lower wages as a robustness check we see that ad hoc risk measures based on earnings mobility indicators confirm these findings

evidence on adverse selection equilibrium signaling and cross subsidization in the insurance market the configuration of equilibrium in the market for automobile collision insurance is examined empirically by representing the premium deductible menu and the demand function as a standard hedonic system using contractual data from a representative insurer we estimate a reduced form hedonic premium equation and the inverse of the marginal bid equation for insurance coverage the data reveal an equilibrium with adverse selection and market signaling but lead us to reject the hypothesis that high risks receive contracts subsidized by low risks

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

a note on parental and child risk valuation the paper develops a model that allows the estimation of parent s valuation of own and child health in an endogenous risk framework where parents can employ multiple activities to protect themselves and their children from a health risk these risk reducing activities may differ in their effectiveness and their intensity of use we suggest how to estimate the parent s ex ante marginal willingness to pay for a reduction in the ambient level of health risk unencumbered by expected utility terms

valuing air quality with hedonic and discrete choice models environmental economists have been using property values in attempts to measure the value residents place on air quality as far back as the 1960s however in the years since then we have learned a great deal about how complex valuing nonmarginal changes in air quality is rosen presented a hedonic model that is still extremely influential today but the estimation strategy he outlined in that paper had some shortcomings many of these identification and endogeneity issues were corrected subsequently in papers such as palmquist 1984 parsons and bartik but none of these papers concentrated on environmental issues a central issue in estimating the demand or marginal willingness to pay functions for characteristics of housing is the identification of those behavioral functions as distinct from

stigmatized asset value is it temporary or long term stigma is a negative attribute of real estate acquired by environmental contamination and reflected in its value elliot jones 1996 using a model of neighborhood turnover with external economies we show that both temporary stigma and long term stigma are possible equilibrium outcomes after the discovery and cleanup of a hazardous waste site the existence and duration of stigma are examined using hedonic price techniques with data from housing sales prices in dallas county texas we find that results depend critically on distance from the hazardous waste site neighborhood turnover due to changes in the level of poverty also appears likely

housing quality differentials in urban areas abstract this paper applies an equilibrium quality theory for differentiated products to estimate the willingness to pay for improvements in the air quality of chicago cleveland dallas houston and indianapolis the empirical results show i that the structural approach and the standard nonstructural approach give very different benefit figures even for small improvements in air quality and ii that a uniform improvement in air quality implies significant distributional effects

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

nonlinear budget constraints and consumer demand an application to public programs for residential housing abstract this study presents a methodology for exploiting the nonlinear hedonic nature of housing prices to estimate the compensated demands of households for particular housing attributes the methodology is employed to provide hicksian benefit measures of a particular housing subsidy program typical of those undertaken recently in developing countries

combining revealed and stated preference data to estimate preferences for residential amenities a gmm approach we show how stated preference information obtained from a choice experiment and revealed preference information based on housing market transactions can be combined via generalized method of moments gmm estimation specifically we use a moment condition matching the predicted marginal willingness to pay wtp from a first stage hedonic model to the marginal wtp formula implied by the choice experiment utility function this is coupled with other moments from the choice experiment to produce gmm based estimates of parameters that reflect the strengths of each data source our application values remediation of a contaminated site in buffalo new york and we find evidence in support of estimates arising from our approach jel q51 q53

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

an empirical investigation into the performance of ellickson s random bidding model with an application to air quality valuation abstract this paper compares ellickson s random bidding model to the standard hedonic model in estimating benefits due to marginal and non marginal changes in housing attributes using data on the chicago housing market the paper shows that the benefit estimates obtained using the two models are very close in addition various categorizations based on household characteristics are tested in the case of the random bidding model the study shows that the effect of categorization on the overall benefit estimates are negligible moreover the results from the random bidding model reveal that increased income leads to greater demand for environmental quality

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

estimation of a hedonic price equation for bordeaux wine does quality matter in this paper the hedonic price technique is applied to bordeaux wine in the hedonic price function we include not only the objective characteristics appearing on the label of the bottle but also the sensory characteristics of the wine our data come from an experimental study in which juries have evaluated and graded a sample of bordeaux wines the estimation of the hedonic price equation shows that the market price is essentially determined by the objective characteristics the estimation of a jury grade equation shows that quality unlike the market price is essentially determined by the sensory characteristics

residential property price differentials of waste plants evidence from beijing china as a primary source of urban pollution waste plants release toxic gases and polluted waste water that can cause great harm to human health and contaminate water resources the adverse impact of wa

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

credit incentives and reputation a hedonic analysis of contractual wage profiles a hedonic analysis of principal agent employment contracts is developed in which workers and employers exchange labor services and contractual payment patterns within this framework tests of alternative hypotheses are formulated and applied to contract data from a unique household level survey of economic activity in rural china in 1935 the results indicate that credit market constraints motivated workers and employers contract choices that shirking by workers rather than by employers was the dominant incentive issue that reputational concerns rather than threats of termination were the key worker disciplining device and finally that the contract s third party acted as an enforcement device rather than as a matchmaker subject to the availability of matched agent principal data this structural approach to modeling agency relationships can also be used in contemporary settings

hedonics and demand analysis the implicit demand for player attributes i introduction hedonic analysis is the standard technique of applied econometrics for modeling differentiated products a hedonic price function relates the observed price of a differentiated good to the bundle of characteristics of which the good is composed the derivatives of the function with respect to the characteristics are the implied hedonic prices which empirical work typically seeks to estimate as has been recognized since at least the work of rosen 1974 underlying the hedonic price function is an implicit market for these characteristics a number of studies have attempted to estimate the associated supply demand system in particular applied contexts based on data on the quantities of the characteristics used in the estimation of the hedonic price function and the resulting estimated hedonic prices examples include nelson 1978 witte sumka and erekson 1979 and thomas 1993 rather than a complete supply demand system other authors focus only on the implicit demand for characteristics for example polinsky and rubinfeld 1977 harrison and rubinfeld 1978 agarwal and ratchford 1980 bender gronberg and hwang 1980 blomquist and worley 1981 quigley 1982 mendelsohn 1984 and palmquist 1984 a curious aspect of these studies which appears to have gone unrecognized is the failure to draw on modern econometric demand analysis in the estimation of the implied demand system for the characteristics instead the analysis of the implicit market proceeds on the basis of ad hoc typically linear or loglinear functional forms which involve no explicit derivation from consumer theory and which impose arbitrary and non testable restrictions on preferences as a consequence there is little means beyond descriptive econometric measures goodness of fit examination of signs and t ratios and so on for judging the adequacy or legitimacy of the results no use is made of contemporary flexible functional form methodology which provides a second order approximation to arbitrary preferences and which permits in addition to the calculation of elasticities the testing of fundamental hypotheses of consumer theory such as demand homogeneity and symmetry of the slutsky matrix and numerical checks on the concavity of the associated implied expenditure function the present work attempts to fill this gap however instead of a differentiated good in a product market to which consumer demand theory would apply we choose to study a good in a factor market so that the relevant demand equations are a system of factor demands for the underlying characteristics the good in question is the service of baseball players to major league baseball teams which is a differentiated good in that different players represent different bundles of alternative attributes such as pitching or hitting skills our focus is solely on the implicit demand system for these attributes no attempt is made to estimate the associated supply system reflecting player behavior there are several reasons for this seemingly peculiar choice of commodity first the factor market for baseball players is of some intrinsic interest as evidenced by the extent to which it has been studied by economists for a taste of this see the entry by quirk 1987 in the new palgrave and the recent survey by fort and quirk 1995 in particular the market has been the focus of work by labor economists examples are blass 1992 khan 1993a 1993b and sommers 1992 much of this literature derives from the seminal work of scully 1974 who estimated equations for baseball player salaries as functions of player skills although not previously recognized in these terms underlying scully s salary equations are implicit markets for player skills the previous work involving baseball salary equations by scully 1974 1989 and others for example blass 1992 hill and spellman 1984 fort 1992 pascal and rapping 1972 raimondo 1983 and sommers 1990 is useful because it provides guidance as to the appropriate specification of the hedonic price equation

new brand positioning and pricing in an oligopolistic market the positioning and pricing of a new brand requires knowledge about the relationship of both demand and cost with potential attribute locations and prices this paper addresses this problem and illustrates it in the context of the automobile market multi attribute expected utility theory which allows for consumer uncertainty about the brands is used to model individuals behavior attribute weights are estimated from market survey data on brands attributes and preferences using linmap as an estimation procedure expected utility is then updated using the multinomial logit model and choice data to account for the observation that stated preferences do not perfectly reflect the eventual choice it is hypothesized that when faced with an actual choice price may become more important to the consumer while other attributes may become more or less important than is reflected in stated preferences the resulting estimated choice probabilities are aggregated to form demand functions facing each brand which depend on all brands prices and attribute space locations assuming there is a price equilibrium in the existing market and that firms have the same variable cost function variable costs as a function of a brand s attribute levels are estimated given the demand and cost functions facing each firm including the potential new entrant the profit maximizing positioning and pricing of a new brand is analyzed using a game theoretic approach a solution is sought under the assumption that incumbents react to entry by changing their prices possible approaches to the translation of the perceptual attribute positioning of the new brand to physical and engineering attributes are reviewed improvements and future extensions of the study are discussed