estimating distance gradients for apartment properties the effect of distance from the city centre on selling price tax assessment and gross income is investigated for income property in proximity to the city centre hedonic estimation with a multiplicative model specification is used to estimate the relationship between property characteristics on the one hand and price assessment and income on the other the sample consists of centrally located apartment buildings in downtown stockholm sold during a recent three year period the application is specific to stockholm but the methodology and the insights gained are general the results include the estimation of price gradients for the dependent variables the models are used for estimating the implicit capitalisation rates in the property market as a function of the distance to the centre we also estimated where the market appears to place the city centre as implied by the observations although no rent gradient was found we were able to detect a significant negative price gradient the former is reasonab

investment the current account and the relative price of non traded goods in a small open economy abstract this paper incorporates traded and non traded investment expenditure into an infinite horizon setting with optimizing economic agents extending previous research that has incorporated traded and non traded investment into a two period setting the paper analyzes the dynamic adjustment of the relative price of non traded output the market price of capital and the current account following exogenous shocks to the system the exogenous shocks considered by the paper include permanent transitory and anticipated changes in an income tax and an investment subsidy as well as changes in the level of government purchases of traded and non traded output

the effect of children on adult demands for health risk reductions we examine patterns in adults willingness to pay for health risk reductions we allow both their marginal utilities of income and their marginal disutilities from health risks to vary systematically with the structures of their households demand by adults for programs which reduce their own health risks is found to be influenced by 1 their parenthood status 2 the numbers of children in different age brackets currently in their households 3 the ages of the adults themselves 4 the latency period before they would fall ill and 5 whether there will still be children in the household at that time for younger adults willingness to pay by parents is greater than for non parents and increases with each additional young child for middle aged adults willingness to pay for corresponding risk reductions falls when teenagers are present and falls further with each additional teenager in the household language en

the current account in the macroeconomic adjustment process macroeconomic adjustments to changes in the economic environment are to a large extent conditioned by the intertemporal choices of economic agents when agents face an intertemporal budget constraint a decision to alter current indebtedness implies changes in future consumption possibilities and will be based on expectations of the entire future path of key variables and not only current variables a formal model to show how today s current account is a function of both current and future economic variables is presented the determination of the current account under classical assumptions of market clearing and continuous full employment is emphasized

intertemporal price speculation and the optimal current account deficit abstract the paper studies the effects of terms of trade fluctuations in an infinite horizon optimizing model of a small open economy while the current account response to a transitory terms of trade shock is in part explicable by intertemporal smoothing an important additional factor is the effect of anticipated future terms of trade shifts on the ral value of the external debt in terms of the home consumption basket when foreign borrowing is indexed to the import good a temporary worsening of the terms of trade creates the expectation of a decline in the real value of external debt this fall in the relevant real interest rate leads households to increase consumption while export prices are low and to decrease consumption sharply once the terms of trade recover if an adverse price shock is of sufficiently brief duration instantaneous utility will rise initially

land values and housing rents in urban japan abstract this paper describes and systematically explains observed variation in land values and housing rents in urban japan it fits a structural model s reduced form equations to intertemporal data over 35 years intercity data across 27 major cities and intracity data in the three largest metropolitan areas explanatory variables are population income their growth rates the interest rate the inflation rate urban land supply and distance from the city center

on the joint determination of biological and economic systems abstract scarce natural resources and our choices to protect or develop them make ecological and economic systems jointly determined human choices affect nature nature affects human choices this essay considers whether a dynamic model that integrates details of an economic system and an ecosystem with explicit feedback links between them yields significantly different results than does ignoring these links we focus on the case of exotic invaders that put native species at risk in yellowstone national park the results suggest that integration does matter in each scenario cutthroat trout populations differ in both magnitude and survival rates depending on whether feedback is allowed between the two systems

can weak substitution be rehabilitated this paper develops a graphical analysis and an analytical model that demonstrate how weak substitution can be used for non market valuation weak complementarity and weak substitution represent preference restrictions that allow us to develop equivalent price changes to describe quantity or quality changes in non market goods the price changes are hicksian equivalents in that they yield the same utility changes as would the quantity or quality changes after discussion of several potential applications of weak substitution the paper develops the parallel between the restriction and recent strategies from modeling differentiated goods

schooling and economic well being the role of nonmarket effects standard estimates of the economic value of additional schooling based on earnings differences associated with differences in the level of schooling attained cover only a portion of the total effects of education that are valued by citizens we first identify a catalog of nonmarketed effects many of which have been recently studied by economists and then propose a procedure for estimating a willingness to pay value for these effects using empirical estimates of the magnitude of a selection of these effects found in the literature we calculate willingness to pay values using our proposed procedure these illustrative calculations suggest that standard estimates of the benefit of incremental schooling substantially understate the full value of such investments

the possibility of positive rent gradients reconsidered abstract despite empirical evidence to the contrary most residential location models are consistent only with a negative rent gradient richardson has suggested including average neighborhood plot size as an argument of the utility function a positive rent gradient is not then a priori inconsistent with equilibrium however richardson does not define the concept of equilibrium and the purpose of this paper is to suggest a reasonable definition and to show that the rent gradient is negative if the utility function is strictly quasi concave and if individual and average neighborhood plot size are substitutes

deterioration of the terms of trade and capital accumulation a reexamination of the laursen metzler effect abstract this paper analyzes the effect of both a permanent and a temporary deterioration in the terms of trade on a small open economy the model based on intertemporal optimization emphasizes the labor leisure choice and the role of capital accumulation the transitional dynamics is shown to depend upon the long run response of the capital stock to the terms of trade shock this consists of a negative substitution effect together with a positive income effect whether or not the laursen metzler effect holds depends upon whether the income effect dominates the substitution effect

tariffs and the current account with short run capital specificity abstract permanent tariff reductions are shown to result in a deterioration of the current account even under intertemporal optimising by consumers this is due to the assumption of short run fixity and long run mobility of capital

multiple output child health production functions the impact of time varying and time invariant inputs author affiliation mark d agee department of economics pennsylvania state university altoona pa 16601 usa mda4 psu edu corresponding authorscott e atkinson department of economics university of georgia athens ga 30602 usa atknsn uga eduthomas d crocker department of economics and finance university of wyoming laramie wy 82071 usa tcrocker uwyo edu acknowledgment comments and suggestions from two anonymous referees are gratefully acknowledged the u s environmental protection agency financially supported this research effort through grant number r82871601 however the research has not been subjected to the agency s required peer and policy review and therefore does not necessarily reflect the views of the agency 1 introductionin this paper we attempt to broaden and to redirect the standard theoretical and empirical approach in economics to the household production of human health especially child health the last decade has witnessed increased concern with the impact of public policies and private investments on child health perhaps motivated by an increased concern for equity and an enhanced recognition that human capital formation in children contributes significantly to society s future well being children live in households with parents or adults who combine their skills with good as well as bad inputs that produce good as well as bad child health outcomes physical behavioral and cognitive a good input could be the time spent reading to a child while a bad input could be parental smoking near a child a good outcome could be higher reading skills while a bad outcome could be a child s ill health three features distinguish our modeling approach to the household production of child outcomes first we argue that multiple good and bad inputs can affect multiple measures of good and bad outcomes for children ignoring this by estimating single equation relationships produces omitted variable bias and fails to model the tradeoffs among inputs and outcomes to examine jointness among several good and bad outcomes as well as inputs and allow for heterogeneity among households in the productivity of observed child inputs we specify and estimate an output based directional distance function chambers chung and fare 1998 for a balanced panel of households with coresident children this function allows us to estimate the maximum expansion of goods and the contraction of bads subject to a given level of observed inputs for a household using the underlying joint technology second we argue that households will produce child health with varying degrees of effectiveness the best practice household is defined as that household that cannot make further increases in all good dimensions of child health and reductions in all bad dimensions by some additive amount using a given level of observed inputs this household practices its child care on the production frontier households within this frontier make less efficient use of personal and marketed child care inputs thus we estimate the technical efficiency for household units in producing multiple outputs from multiple inputs finally although we have panel data and compute a fixed effects estimator we recover the effects of time invariant variables such as sex race and parent attributes on goods and bads in a second stage regression we adjust their estimated standard errors and correct for the bias caused by weak instruments in the first stage using a jackknife technique the next section presents background for our hypotheses of i jointness in the household production of child health outcomes and ii the presence of technical inefficiency among households in the production process in section 3 we discuss properties of the directional distance function and the calculation of partial effects results are presented in section 4 and conclusions follow in section 5

parental and social valuations of child health information abstract we construct an endogenous risk model of the influence of more precise hazard information on the parental demand for child health a 256 observation data set is used to estimate the marginal value to parents and to society of risk information about the future consequences of children s body lead burdens our results indicate that the social value of risk information greatly exceeds the cost of providing it and that parents will purchase too little of this information

current account dynamics in a finite horizon model abstract this paper examines the response of the current account in a small open economy to a permanent change in the price of imported intermediate goods to do so it extends blanchard s 1985 open economy model to incorporate the capital stock with adjustment costs a la hayashi 1982 a price increase in imported intermediate goods can be viewed as a combination of transfer payments abroad and capital taxation the former effect leads to a current account deficit and the latter leads to a current account surplus the overall effect depends on the relative magnitude of these effects

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

parental altruism and child lead exposure inferences from the demand for chelation therapy we use parents decisions to treat their children s body burdens of lead to infer parental ex ante willingness to pay for reduced burdens willingness to pay is estimated with a data set containing 256 observations the data were originally gathered to assess the impact of children s body lead burdens upon their intellectual and behavioral development our results indicate that parental ex ante willingness to pay for a 1 percent reduction in child body lead burden exceeds the estimated ex post savings in medical treatment and compensatory education costs caused by the same reduction

altruism fertility and the value of children health policy evaluation and intergenerational welfare abstract this paper accounts for the value of children and future generations in the evaluation of health policies this is achieved through the incorporation of altruism and fertility in a value of life type of framework we are able to express adults willingness to pay for changes in child mortality and also to incorporate the welfare of future generations in the evaluation of current policies our model clarifies a series of puzzles from the literature on the value of life and on intergenerational welfare comparisons we show that by incorporating altruism and fertility into the analysis of the recent u s experience the estimated welfare gain of a young adult from reductions in mortality easily doubles

the structure of urban land prices abstract recognition of the existence of nonlinear land prices has an impact on the measurement of the rate at which land price declines with distance from the urban center it is hypothesized that concave parcel prices have given rise to overly large estimates of the rate of price decline with distance because parcel sizes increase with distance and increased parcel sizes would be associated with lower unit prices as a result of the concavity of the land price function this hypothesis is empirically tested using vacant residential commercial and industrial land sales from within cook county illinois an important finding is that allowing for concavity greatly reduces although it does not eliminate measured rates of price decline with distance

current account determination with traded capital goods abstract a model of real current account determination in a small open economy with many final goods sectors and traded capital goods is presented the model emphasizes the ambiguity of investment response and encourages sector specific empirical methods

economies human capital and natural assets human capital concerns are used to structure links between the economy and the environment suggestions for empirical work to explore these structures are provided particular attention is devoted to connections between environmental hazards and influences upon parents decisions to invest in forming children s human capital

valuing changes in health risks a comparison of alternative measures essential to efficient provision of health safety and the environment is correct valuation of risks to human health in a world of scarcity difficult decisions concerning tradeoffs between health and other desirables are unavoidable in this paper we develop a model of health investment under uncertainty which yields a general expression for values of changes in risks to human health the preference based values of morbidity risks and mortality risks are ex ante dollar equivalents of changes in expected utility associated with risk changes the preference based values are related to two alternative measures costs of illness and preventive expenditures which are thought to be lower bounds on the value of risk reductions we demonstrate that these alternative measures are not even special cases of the more general measure and that the size relationships among the three measures are complex also we derive the relationship between the willingness to pay for risk changes and the consumer surpluses associated with health changes which occur with certainty the next section contains a brief review of the approaches to valuing changes in health

terms of trade factor intensities and the current account in a life cycle model this paper examines the effects of terms of trade changes on the external adjustment of a small open economy where each consumer has a life cycle saving function the supply side of the economy is given by the standard two sector model with two primary factors labour and capital it is shown that when both commodities are produced a terms of trade deterioration leads to a current account deficit surplus if the export import sector is more labour intensive

tariffs and the current account abstract this paper examines the impact of a tariff on the current account in a model which emphasizes the fact that it takes time for the production sector of an economy to adjust to a change in relative prices income effects of the adjustment lead to a transitory current account surplus because the deleterious effect of the tariff on national income is larger in the long run than in the short run in addition relative prices overshoot in response to the tariff leading to an increase in the consumption rate of interest which in turn generates an increase in desired saving

macroeconomic policy exchange rate dynamics and optimal asset accumulation the paper develops a model of exchange rate and current account determination for a small economy peopled by infinitely lived utility maximizing households in this setting a central bank purchase of foreign exchange has no real effects when central bank foreign reserves earn interest at the world rate and proceeds are returned to the public in contrast an increase in the monetary growth rate does have real effects even in the long run the model developed here implies that an increase in government spending may lead to a surplus on current account the external adjustment process predicted by the model is one in which consumption real balances and external assets all rise or fall simultaneously