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

explaining business cycles in small open economies abstract this paper analyzes the role of world price shocks fluctuations in the prices of capital intermediate and primary goods and in the world real interest rate in the generation and propagation of business cycles in small open developing countries i construct a stochastic dynamic multi sector small open economy model the model is a variant of the specific factors model and reflects the major structural characteristics of developing economies i utilize variance decomposition methods to quantitatively evaluate the impact of world price shocks the results indicate that world price shocks account for a significant fraction of business cycle variability in developing countries

the geography of market failure edge effect externalities and the location and production patterns of organic farming abstract perceptions of increasing land scarcity and negative impacts of chemical based agriculture have led to increasing concern regarding the sustainability of food systems incompatible production processes among farming systems may lead to spatial conflicts and production losses between neighboring farms and the magnitude of such losses may depend not only on the scale of each activity but also on patterns of land use such conflicts can be classified as edge effect externalities spatial externalities whose marginal impacts decrease as distance from the border generating the negative impact increases this paper tests the hypothesis that edge effect externalities have influenced the location and production patterns of certified organic farms using data from california central valley certified organic farmers using concepts from landscape ecology and spatial statistics we investigate difference in parcel geometry and surrounding land uses between organic and non organic parcels using a generalized method of moments gmm spatially autoregressive econometric model we demonstrate that both parcel geometry and surrounding land uses influence the probability of a given parcel being certified organic we conclude with suggestions for policies to encourage development of organic farming regions

interpreting the great moderation changes in the volatility of economic activity at the macro and micro levels most advanced economies have experienced a striking decline in the volatility of aggregate economic activity since the early 1980s volatility reductions are evident for output and employment at the aggregate level and across most industrial sectors and expenditure categories inflation and inflation volatility have also declined dramatically previous studies offer several potential explanations for this great moderation we review evidence on the great moderation in conjunction with evidence about volatility trends at the micro level we combine the two types of evidence to develop a tentative story for important components of the aggregate volatility decline and its consequences the key ingredients are declines in firm level volatility and aggregate volatility most dramatically in the durable goods sector surprisingly this has occurred without a decline in household consumption volatility and individual earnings uncertainty our explanation for the aggregate volatility decline stresses improved supply chain management particularly in the durable goods sector and less important a shift in production and employment from goods to services we provide evidence that better inventory control made a substantial contribution to declines in firm level and aggregate volatility consistent with this view if we look past the turbulent 1970s and early 1980s much of the moderation reflects a decline in high frequency short term fluctuations while these developments represent efficiency gains they do not imply nor is there evidence for a reduction in economic uncertainty faced by individuals and households

on the sources of aggregate fluctuations in emerging economies recent research on macroeconomic fluctuations in emerging economies has advocated introducing a stochastic productivity trend or allowing for interest rate shocks and financial frictions we estimate a model that encompasses these two approaches shedding light on their relative merits and on how financial frictions affect the transmission of shocks the model accounts for aggregate fluctuations by assigning a dominant role to financial frictions in amplifying conventional temporary productivity shocks whereas trend shocks play a minor role a link between spreads and expected future productivity emerges as essential for a reasonable approximation to the data

monetary accommodation exchange rate regimes and inflation persistence stable url http links jstor org sici sici 0013 0133 28199205 29102 3a412 3c461 3amaerra 3e2 0 co 3b2 lthe economic journal is currently published by royal economic society your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals res html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgwed feb 13 07 34 49 2008

heterogeneous impact of soil contamination on farmland prices in the belgian campine region evidence from unconditional quantile regressions we estimate a hedonic pricing model using geo coded farmland transaction data from the campine region situated in the north east of belgium unlike previous hedonic studies we use the method of unconditional quantile regression firpo et al in econometrica 77 3 953 973 2009 an important advantage of this new method over the traditional conditional quantile regression koenker and bassett in econometrica 46 1 33 50 1978 is that it allows for the estimation of potentially heterogeneous effects of cadmium pollution along the entire unconditional distribution of farmland prices using a threshold specification of the hedonic pricing model we find evidence of a u shaped valuation pattern where cadmium pollution of the soil has a negative and significant impact on prices only in the middle range of the distribution insofar as cadmium concentrations are above the regulatory standard of 2 parts per million for agricultural land results obtained from a probit model to classify land plots into different price segments further suggest that the heterogeneous impact of soil pollution on price can be directly related to the variety of amenities that farmland provides

the amenity value of english nature a hedonic price approach using a hedonic property price approach we estimate the amenity value associated with proximity to habitats designated areas domestic gardens and other natural amenities in england there is a long tradition of studies looking at the effect of environmental amenities and disamenities on property prices but to our knowledge this is the first nationwide study of the value of proximity to a large number of natural amenities in england we analysed 1 million housing transactions over 1996 2008 and considered a large number of environmental characteristics results reveal that the effects of many of these environmental variables are highly statistically significant and are quite large in economic magnitude gardens green space and areas of water within the census ward all attract a considerable positive price premium there is also a strong positive effect from freshwater and flood plain locations broadleaved woodland coniferous woodland and enclosed farmland increasing distance to natural amenities such as rivers national parks and national trust sites is unambiguously associated with a fall in house prices our preferred regression specifications control for unobserved labour market and other geographical factors using travel to work area fixed effects and the estimates are fairly insensitive to changes in specification and sample this provides some reassurance that the hedonic price results provide a useful representation of the values attached to proximity to environmental amenities in england overall we conclude that the housing market in england reveals substantial amenity value attached to a number of habitats designations private gardens and local environmental amenities

trade finance specialization and synchronization i investigate the determinants of business cycle synchronization across regions the linkages between trade in goods financial openness specialization and business cycle synchronization are evaluated in the context of a system of simultaneous equations the main results are as follows i specialization patterns have a sizable effect on business cycles most of this effect is independent of trade or financial policy but directly reflects differences in gdp per capita ii a variety of measures of financial integration suggest that economic regions with strong financial links are significantly more synchronized even though they also tend to be more specialized iii the estimated role of trade is closer to that implied by existing models once intra industry trade is held constant the results obtain in a variety of data sets measurement strategies and specifications they relate to a recent strand of international business cycle models with incomplete markets and transport costs and on the empir

an exploration in the theory of exchange rate regimes three exchange rate regimes a float a one sided peg and a cooperative peg are evaluated and compared in terms of efficiency and welfare levels the framework of analysis embodies country specific monies with the money of each country being used to transact in its commodity markets and its currency denominated bonds welfare levels depend only on consumption levels in the presence of perfect foresight all equilibrium allocations are pareto efficient in a floating exchange rate regime the perfect foresight equilibrium allocation coincides with an equilibrium of a costless barter economy the same result holds in a one sided peg if the pegging country s exchange rate stabilizing authority breaks even over time in a cooperative peg regime there is a different equilibrium allocation for each combination of exchange rate levels and monetary policies problems of policy coordination and conflicts in desired monetary policies are discussed

amenities in an urban equilibrium model residential development in portland oregon this paper estimates the effects of reduce water quality and pollute disturb open space and other amenities on housing prices or destroy natural habitats for wildlife and development density in portland oregon open space takes many forms city within the framework of an urban equilibrium parks provide some types of recreational model amenities are important households are and visual amenities willing to pay more for newer houses located in greenbelts and ecoareas of less dense development with more open logical reserves typically are larger than space better views less traffic congestion and city parks and ofter natural open space near amenity locations for the developers in areas that provide a broad range of sercreases in housing prices results in providing vices the experience of cities with ambimore large houses which will ultimately lead to tious open space policies such as porthigher density and lower housing prices a simu land oregon and boulder colo rado lation analysis evaluates policy im plications and suggests that such policies have a signifiindicates substantial benefits from alterations in cant effect on property values preserving housing patterns

valuing the reliability of the electrical power infrastructure a two stage hedonic approach the reliability of electrical power supply is amongst the conditions that inform house purchase decisions in all urban areas reliability depends in part on the conditions of the power generation and distribution infrastructures involved and in part on environmental conditions its value to homeowners may be capitalised into the value of the house in this paper a hedonic pricing approach is used to estimate the capitalised value of the reliability offered by distribution infrastructures and the environmental conditions with which they interact in phoenix arizona a first stage estimates the impact of infrastructure and environmental conditions on reliability in a second stage the capitalised value of reliability from the marginal willingness to pay for reliability revealed by house purchase decisions is estimated and used to infer the value of both infrastructural characteristics and environmental conditions

capital flows investment and exchange rates abstract this paper incorporates international capital flows into a two country monetary general equilibrium model of asset prices with investment and production we calculate theoretical covariances between investment the current account the exchange rate and the terms of trade these covariances depend upon the coefficient of relative risk aversion the magnitude and sign of a country s net international indebtedness other properties of tastes and technologies and the stochastic processes on disturbances to productivity and monetary growth rates international capital flows arise from changes in world wealth and its relative composition in foreign and domestic assets

what happens during recessions crunches and busts we provide a comprehensive empirical characterization of the linkages between key macroeconomic and financial variables around business and financial cycles for 21 oecd countries over the period 1960 2007 in particular we analyse the implications of 122 recessions 113 28 credit contraction crunch episodes 114 28 episodes of house price declines busts 245 61 episodes of equity price declines busts and their various overlaps in these countries over the sample period our results indicate that the interactions between macroeconomic and financial variables can play a major role in determining the severity and duration of a recession specifically we find evidence that recessions associated with credit crunches and house price busts tend to be deeper and longer than other recessions stijn claessens m ayhan kose and marco e terrones

measuring poverty in a growing world or measuring growth in a poor world the extent to which growth reduces global poverty has been disputed for 30 years although there are better data than ever before controversies are not resolved a major problem is that consumption measured from household surveys which is used to measure poverty grows less rapidly than consumption measured in national accounts in the world as a whole and in large countries particularly india china and the united states in consequence measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries one plausible cause is that richer households are less likely to participate in surveys but growth in the national accounts is also upward biased and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys so it is possible for consumption of the poor to grow less rapidly than national consumption without any increase in measured inequality current statistical procedures in poor

riparian buffers and hedonic prices a quasi experimental analysis of residential property values in the neuse river basin riparian buffers the strips of vegetation along banks of rivers and streams have been proposed as a key instrument to protect water quality in the united states riparian buffers impose a restriction on the use of private property limiting harvest and development but buffers can also provide for aesthetic and recreational benefits that may accrue to property owners with data from the neuse river basin in north carolina this study attempts to provide empirical evidence on the effect of a mandatory buffer rule on the value of riparian properties spatial autoregressive hedonic models are estimated within a quasi experimental framework using the imposition of the buffer rule as the treatment and nonriparian properties as a control group results indicate that a riparian property generally commands a high premium we find no evidence however that the mandatory buffer rule has had a significant impact on riparian property values when compared with the control group copyright 2009 oxford university press

water quality and cottage prices in ontario we use hedonic analysis to show that water clarity has a significant effect on lakefront property values in the near north ontario canada in this study water clarity is measured by secchi disc reading based on two different dependent variables sales price and sales price per square foot and the estimation of linear log linear and log log models we find that water clarity does matter to lakefront property buyers in the near north ontario in particular our results indicate that buyers are willing to pay about 2 more for each 1 foot increase in water clarity or secchi depth this finding is consistent across all of our specifications

consequences of the clean water act and the demand for water quality since the 1972 u s clean water act government and industry have invested over 1 trillion to abate water pollution or 100 per person year over half of u s stream and river miles however still violate pollution standards we use the most comprehensive set of files ever compiled on water pollution and its determinants including 50 million pollution readings from 240 000 monitoring sites and a network model of all u s rivers to study water pollution s trends causes and welfare consequences we have three main findings first water pollution concentrations have fallen substantially between 1972 and 2001 for example the share of waters safe for fishing grew by 12 percentage points second the clean water act s grants to municipal wastewater treatment plants which account for 650 billion in expenditure caused some of these declines through these grants it cost around 1 5 million 2014 dollars to make one river mile fishable for a year we find little displacement of municipal expenditure due to a federal grant third the grants estimated effects on housing values are smaller than the grants costs we carefully discuss welfare implications

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

negative externalities on property values resulting from water impairment the case of the pigeon river watershed the objective of this research was to determine whether willingness to bear the negative externality from water quality impairment differs between those who do and those who do not receive economic benefit from the impairment source differences were tested using a hedonic analysis of ambient water quality in two discrete housing markets in the pigeon river watershed which have been polluted by the operation of a paper mill the results suggest that north carolina residents residing in subwatersheds with impaired portions of the pigeon river who experience economic benefit from the paper mill in addition to its harmful effects on water quality do perceive the pollution as a negative externality in contrast the effects of both the degraded river and its contributing streams on property values are perceived as negative externalities by watershed residents in tennessee who experience only harmful effects from the pollution differences in willingness to bear the water impairment externality were not indicated by variables representing view of and proximity to impaired water bodies the results suggest that the perception of water quality to which property owners implicitly apply value should be considered when establishing water quality regulations

global business cycles convergence or decoupling we analyze the evolution of the degree of global cyclical interdependence over the period 1960 2008 using a dynamic factor model we decompose macroeconomic fluctuations in output consumption and investment into a global factor factors specific to country groups and country specific factors we find that during 1985 2008 there is some convergence of business cycle fluctuations among industrial economies and among emerging market economies surprisingly there is a concomitant decline in the relative importance of the global factor we conclude that there is evidence of business cycle convergence within each of these two groups of countries but divergence or decoupling between them

the value of a healthy home lead paint remediation and housing values abstract the presence of lead paint significantly impairs cognitive and behavioral development yet little is known about the value to households of avoiding this residence specific environmental health risk in this paper we estimate the benefits of lead paint remediation on housing prices using data on all homes that applied to a hud funded program in charlotte north carolina we adopt a difference in differences estimator that compares values among remediated properties with those for which an inspection does not identify a lead paint hazard results indicate large returns for public and private investment in remediation with each 1 spent on lead remediation generating 2 60 in benefits as well as a reduction in residential turnover

an interregional hedonic analysis of noxious facility impacts on local wages and property values abstract since the early work of rosen roback and more recently blomquist berger and hoehn economists have recognized that local environmental amenities influence wage rates and property values jointly moreover local differentials in these prices can be used to implicitly value local amenities unfortunately much of the empirical work on noxious facilities has focused on a narrow range of facility types often within a single city generally distance from the facility is used to proxy exposure to the disamenity although it is possible that the mere existence of a noxious facility in a region has an impact on local residents we employ an intercity hedonic model to measure the joint property value and wage effects of a broad range of noxious facilities using public use microdata from the 1980 united states census we show that property values and or wages are significantly influenced by the existence of noxious facilities calculated implicit prices reveal that local residents are most averse to the presence of petrochemical refineries and nuclear power plants

optimal land development with endogenous environmental amenities a spatially explicit model of the optimal timing and location of land development is presented that incorporates dynamic interactions between land development and water quality ignoring two way interactions leads to a lower level of water quality more development and lower social welfare the optimal pace and pattern of development can be achieved through the assessment of an impact fee that internalizes pollution damages and irreversibility costs our results demonstrate the importance of accounting for the spatial dimension of land use the interdependence between land use and environmental quality and development irreversibility in models of urbanization and amenity driven growth copyright 2008 oxford university press

persistence in real variables under alternative exchange rate regimes some multi country evidence abstract in this paper we try to establish empirically whether a different degree of persistence is found in real variables under alternative nominal exchange rate systems the measure of persistence employed is the modified rescaled range statistic proposed by lo econometrica 1991 59 1279 1313 which tests for the presence of long range dependence after having accounted for a wide class of short memory processes the empirical results indicate a systematic increase in persistence in real variables under floating

terms of trade and exchange rate regimes in developing countries abstract since friedman essays in positive economics university of chicago press chicago 1953 157 203 an advantage often attributed to flexible exchange rate regimes over fixed regimes is their ability to insulate more effectively the economy against real shocks i use a post bretton woods sample 1973 96 of 75 developing countries to assess whether the responses of real gdp real exchange rates and prices to terms of trade shocks differ systematically across exchange rate regimes i find that responses are significantly different across regimes in a way that supports friedman s hypothesis the paper also examines the importance of terms of trade shocks in explaining the overall variance of output and prices in developing countries

enhanced geospatial validity for meta analysis and environmental benefit transfer an application to water quality improvements meta regression models are commonly used within benefit transfer to estimate willingness to pay wtp for environmental quality improvements theory suggests that these estimates should be sensitive to geospatial factors including resource scale market extent and the availability of substitutes and complements valuation meta regression models addressing the quantity of non market commodities sometimes incorporate spatial variables that proxy for a subset of these effects however meta analyses of wtp for environmental quality generally omit geospatial factors such as these leading to benefit transfers that are invariant to these factors this paper reports on a meta regression model for water quality benefit transfer that incorporates spatially explicit factors predicted by theory to influence wtp the metadata are drawn from stated preference studies that estimate per household wtp for water quality changes in united states water bodies and combine primary study information with extensive geospatial data from external sources results find that geospatial variables are associated with significant wtp variations as predicted by theory and that inclusion of these variables reduces transfer errors

currency crashes in emerging markets an empirical treatment we use a panel of annual data for over 100 developing countries from 1971 through 1992 to characterize currency crashes we define a currency crash as a large change of the nominal exchange rate that is also a substantial increase in the rate of change of nominal depreciation we examine the composition of the debt as well as its level and a variety of other macroeconomic factors external and foreign crashes tend to occur when output growth is low the growth of domestic credit is high and the level of foreign interest rates are high a low ratio of fdi to debt is consistently associated with a high likelihood of a crash

dissecting the cycle a methodological investigation following burns and mitchell we define the cycle as a pattern in the level of aggregate economic activity an algorithm to locate turning points is developed as is a new measure of pro cyclicality a link between turning points and the moments of the series is established thereby providing the statistical foundation that burns and mitchell s work lacked using these tools we are able to dissect cycles in terms of the contributions made by trend growth volatility serial correlation and non linear effects we dissect several models and find little evidence that certain non linear effects are important to the nature of business cycles

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

the demonstration and capture of the value of an ecosystem service a quasi experimental hedonic property analysis water management can generate valuable ecosystem services but can be costly to implement we examine this issue using irrigation water storage infrastructure which has the potential to provide desirable services to residential properties affected by the condition of the storage structure we examine a particular prairie setting where concerns regarding fluctuations in water levels of an irrigation storage lake led to an agreement between the irrigation agency and the owners of properties around the lake to stabilize water levels using quasi experimental hedonic property approaches with two different control groups we estimate the subsequent impact of this agreement on shoreline property values using a time series of sales data the methods utilized in this article represent an effective approach to produce plausible estimates of some of the economic values captured by the infrastructure generating ecosystem services we find that property values increased as a result of the agreement and that the additional property tax revenues arising from these values can be used to some extent to offset the annual service fees paid to the irrigation agency to provide the stabilized lake levels this article illustrates the potential for irrigation infrastructure management to provide increases in ecosystem service values beyond irrigation and also that these values can be captured to pay for the costs of providing these increased values

a further exploration in the theory of exchange rate regimes in an interesting paper in this journal elhanan helpman 1981 develops a simple two country model to compare the welfare levels that are achieved under different exchange rate regimes in a world characterized by perfect foresight his basic finding is that equilibrium consumption allocations and hence welfare levels are identical under a floating exchange rate system and a one sided peg fixed exchange rate regime this result is due to helpman s assumption that output is determined exogenously which allows a separation of the real and monetary sides of the economy the purpose of this paper is to extend helpman s model by making two alterations in his setup 1 to allow production to be endogenously determined as a function of labor force participation and 2 to allow welfare levels to be dependent on labor service as well as on consumption the main conclusion then obtained is that a country may achieve a higher welfare level under a flexible exchange rate regime than under a fixed exchange rate regime since it is able to choose an optimal rate of inflation or currency depreciation

inventories and the three phases of the business cycle this article demonstrates that recessions typically are followed by high growth recovery phases that push output back to its prerecession level thus postwar fluctuations in real output in the united states have consisted of three sequential phases rather than two contractions high growth recoveries and moderate growth periods following recoveries data from before world war ii also exhibit this pattern for the postwar period the three phase pattern is shown to reflect swings in inventory investment and suggests that output fluctuations have an important transitory component the evidence in this article supports delong and summers s output gaps view and friedman s plucking model view of fluctuations

real interest parity rip over the 20th century new evidence based on confidence intervals for the largest root and the half life abstract in this paper we employ local to unity asymptotics to investigate the validity of real interest parity rip for three countries relative to the us using long span data we find that deviations from parity are corrected quickly and this is what could in principle be expected to happen in an integrated world where economic forces act rapidly so that discrepancies do not grow systematically over time moreover the observed speed of reversion raises important issues for policy in that the tendency for rates to converge implies that the impact of the domestic authorities stabilization polices might be limited finally there is no clear cut difference in the adjustment to shocks across fixed and floating regimes

rejoinder to james hamilton hamilton 2001 makes a number of comments on our paper harding and pagan 2002b the objectives of this rejoinder are firstly to note the areas in which we agree secondly to define with greater clarity the areas in which we disagree and thirdly to point to other papers including a longer version of this response where we have dealt with some of the issues that he raises the core of our debate with him is whether one should use an algorithm with a specified set of rules for determining the turning points in economic activity or whether one should use a parametric model that features latent states hamilton begins his criticism by stating that there is a philosophical distinction between the two methods for dating cycles and concludes that the method we use leaves vague and intuitive exactly what this algorithm is intended to measure nothing is further from the truth when seeking ways to decide on whether a turning point has occurred it is always useful to ask the question what is a recession common usage suggests that it is a decline in the level of economic activity that lasts for some time for this reason it has become standard to describe a recession as a decline in gdp that lasts for more than two quarters finding periods in which quarterly gdp declined for two periods is exactly what our approach does what is vague about this

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

the effect of power plants on local housing values and rents abstract this paper uses restricted census microdata to examine housing values and rents for neighborhoods in the united states where power plants were opened during the 1990s compared to neighborhoods with similar housing and demographic characteristics neighborhoods within 2 miles of plants experienced 3 7 decreases in housing values and rents with some evidence of larger decreases within 1 mile and for large capacity plants in addition there is evidence of taste based sorting with neighborhoods near plants associated with modest but statistically significant decreases in mean household income educational attainment and the proportion owner occupied

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

what are the benefits of the water framework directive lessons learned for policy design from preference revelation the water framework directive wfd seeks to achieve good ecological status of surface waters across the european union by 2027 the wfd guidelines explicitly recognize the economics of water management by providing exceptions to water areas with disproportionately high restoration costs this calls indirectly for estimations of benefits lost due to non attainment we employ a hedonic property pricing approach on waterfront recreational properties to estimate the welfare impacts of attaining the good ecological status described by the wfd the empirical challenge is that the quality measure proposed by the wfd specifically denotes ecological quality whereas economically measurable water quality values are heavily dependent on recreation impacts intuitively the choice of water quality measure should have an effect on estimating the value of water quality our data provide a unique chance to compare three alternative indicators of water quality 1 a usability based index 2 subjectively reported measure and 3 the ecological status determined by the wfd we find that an improvement in water quality is associated with a statistically significant non linear change in recreational property values we show how the ecological status compares with the other two indicators and discuss the justifiability of using revealed preference methods when the valued good is defined purely on the basis of ecological criteria

the transmission of disturbances under alternative exchange rate regimes with optimal indexing the paper develops a general stochastic macroeconomic model that can be used to study the international transmission of disturbances under four alternative exchange rate systems uniform flexible exchange rates uniform fixed exchange rates and two versions of two tier exchange rates the analysis makes two general points first one cannot assume stability of structure when assessing the consequences of alternative exchange rate regimes for example the slope of the aggregate supply curve and the rationally formed expectations in the asset markets can respond dramatically to the government s choice of exchange rate regime second exchange rate regimes that provide full insulation from foreign disturbances may nevertheless be inferior to other regimes in terms of their ability to maximize social welfare

does the measurement of environmental quality affect implicit prices estimated from hedonic models hedonic property value models are often used to derive point estimates for identifying the relationship between environmental quality and property prices the measurement of the environmental quality variable is often selected based on convenience but variables reflecting different perceptions about environmental quality may result in implicit prices that vary substantially this case study derives implicit prices for nine measures of water clarity using hedonic property value models of lakefront properties in maine results show that water clarity variables based on different perceptions may result in differences in implicit prices large enough to potentially affect policy decisions

consumer preferences and willingness to pay for water related residences in non urban settings a vignette analysis feitelson e 1992 consumer preferences and willingness to pay for water related residences in non urban settings a vignette analysis reg studies 26 49 68 water bodies are increasingly viewed as amenities that can stimulate growth to affect such growth the sources of consumer demand for water related residences need to be understood a factorial survey technique also known as vignette analysis is used to analyse recent home buyers preferences and willingness to pay for water related residences around the chesapeake bay in addition recent home buyers characteristics are analysed as a function of the relationship between the residence they bought and the bay the study shows that consumer preference for water related residences is a complex phenomenon different population groups stress different water relationships and vary in their willingness to forfeit other attributes for water related residences consequently careful targeting is necessary if water related development is to stimulate gr

have business cycles changed over the last two decades an empirical investigation abstract we document the properties of business cycles of 71 countries 23 industrial countries and 48 emerging market economies or emes from 1970q1 to 2012q4 using the harding and pagan dating algorithm first recessions are deeper steeper and costlier among emes especially in east asia and latin america second recoveries are swifter and stronger among emes partly due to stronger rebound effects third recessions became less costly during the globalization period 1985 2007 for industrial countries and emes thus reflecting institutional changes made during the great moderation fourth the dynamic behavior of macroeconomic indicators around peaks in real gdp is more volatile in downturns associated with crisis compared to other downturns fifth peaks in financial cycles credit and asset prices tend to precede peaks in real output cycles finally although both industrial and emerging markets have experienced deep recessions during the recent global financial crisis the emerging markets have recovered faster

the spatial extent of water quality benefits in urban housing markets water quality regulation continues to be controversial as demonstrated by recent litigation between the u s environmental protection agency and the state of florida over nutrient standards while the costs of standards are usually known benefits may be diverse and difficult to identify this study investigates the effects of enhanced water quality on both waterfront and nonwaterfront property prices using hedonic models within an urban market findings indicate 1 the value of increased water quality depends upon the property s location and proximity to waterfront and the surface area of the water body and 2 aggregate benefits to nonwaterfront homes may dominate those realized by waterfront homeowners

land markets and the value of water hedonic analysis using repeat sales of farmland author s buck s auffhammer m sunding d abstract the lack of robust water markets makes it difficult to value irrigation water because water rights are appurtenant to land it is possible to infer the value of water from observed differences in the market price of land we use panel data on repeat farmland sales in california s san joaquin valley to estimate a hedonic regression equation with parcel fixed effects this controls for sources of omitted variables bias and allows us to recover the value of irrigation water to landowners in our sample we show that a more traditional cross sectional regression results in an artificially low value of irrigation water the author 2014

landscape amenities and local development a review of migration regional economic and hedonic pricing studies abstract with rapid urban expansion and loss of open space attractive local landscapes will continue to gain importance in location decisions and on political agendas the present study reviews the evidence on the local economic role of landscape amenities from two major strands of empirical research migration and regional economic models and hedonic pricing models following common amenity definitions we identify 71 relevant peer reviewed studies and systematically assess the reported effects of the landscape amenity variables the migration and regional economic studies suggest that migrants are attracted by amenities nearly as often as by low taxes reported effects of amenities on income and employment are less consistent the hedonic studies suggest that nature reserves and land cover diversity have mostly open space and forest often and agricultural land rarely positive effects on housing prices studies at larger geographic scales and studies involving urban areas were more likely to identify significant amenity effects some limitations of the evidence may be overcome with better datasets and modeling approaches however in line with other recent work the limitations also highlight the need for complementary information from the analysis of political preferences for land use management

the terms of trade the real exchange rate and economic fluctuations this paper examines the relationship between terms of trade and business cycles using a three sector intertemporal equilibrium model and a large multicountry database results show that terms of trade shocks account for nearly one half of actual gdp variability the model explains weak correlations between net exports and terms of trade the harberger laursen and metzler effect and produces large and weakly correlated deviations from purchasing power parity and real interest rate parity terms of trade shocks cause real appreciations and positive interest differentials although productivity shocks have opposite effects the puzzle that welfare gains of international asset trading are negligible is left unresolved copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

time series decomposition and measurement of business cycles trends and growth cycles abstract a study of business cycles does not require trend estimation and elimination but a study of growth cycles does major cyclical slowdowns and speedups deserve to be analyzed but the needed time series decomposition presents difficult problems mainly because trends and cycles influence each other we compare cyclical movements in levels deviations from trend and smoothed growth rates for both the quarterly real gdp and the monthly u s coincident index using the phase average trend pat then we compare alternative trend estimates deterministic and stochastic linear and nonlinear and the corresponding series of deviations from these trends we discuss how the resulting estimates differ for u s growth cycles in the post world war ii period the results of pat show great similarity to the results obtained with the hodrick prescott local linear trend band pass filtering methods

is all space created equal uncovering the relationship between competing land uses in subdivisions abstract evaluating the importance of different forms of open space to households requires an evaluation of the service flows provided by each type of open space for many non market goods these flows occur over multiple spatial scales and require analysis that simultaneously accounts for capitalization at each scale to meet this often overlooked need we apply a newly developed extension to the hausman taylor model that treats multiple housing transactions occurring in a spatial location as a panel this methodology allows us to account for omitted variables within a subdivision while instrumenting for variables identified through differences between subdivisions we measure capitalization of open space at three distinct spatial extents adjacency walkability and subdivision wide we find that the interactions between subdivision open space and private open space in the form of lot size change from complementarity at small scales to substitutability at large scales these results confirm much of the intuition developed by ecologists and public planners on the likely service flows associated with open space and show how our approach to accounting for multiple spatial scales of capitalization in the evaluation of non market goods could be beneficial to other areas of applied research

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

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

do seller disclosures affect property values buyer information and the hedonic model the hedonic method is widely used to infer the value of environmental amenities that are bundled with real property the interpretation of hedonic prices as marginal values requires that households are fully informed yet there is evidence that buyers are often less informed than sellers a graphical illustration in this study suggests that asymmetric information between buyers and sellers can affect hedonic prices this intuition is confirmed by a quasi random experiment that exploits spatial and information discontinuities stemming from a seller disclosure for flood zones results suggest a 4 decline in housing prices in flood zones after disclosures commenced

attributes determining condominium prices in bangkok in thai the housing market particularly the condominium sector in bangkok has been rapidly expanding in this paper the hedonic price model is used to analyze the housing attributes that determine the price of condominiums in bangkok the box cox technique is used to find an appropriate functional form of the model the data of condominium prices and 20 attributes of 146 condominium units were collected from 42 sales offices during 1 31 january 2011 the results indicate that the attributes determining the price of condominium in bangkok were project location proximity to sky train and subway unit location unit size furniture total number of units in a project land size waiting duration before construction is completed reputation of developers parking space common fee for maintenance and services and number of bedrooms the estimated coefficients indicate relative prices of the attributes which can be used as reference prices for buyers developers and banks

housing market fluctuations and the implicit price of water quality empirical evidence from a south florida housing market in this study we utilize a hedonic property price analysis to examine changes in the implicit price of water quality given housing market fluctuations over time we analyze martin county florida waterfront home sales from 2001 to 2010 accounting for the associated significant real estate fluctuations in this area through flexible econometric controls in space and time we apply a segmented regression methodology to identify housing market price instability over time interact water quality with these identified market segmentations and embed these interactions within a spatial fixed effect model to further account for any spatial heterogeneity in the waterfront market results indicate that water quality improvement is associated with higher property values we find no evidence that the economic downturn crowded out concern for the water quality in this area we further impute an implicit prices of 2614 evaluated at the sample mean for 1 point increase in the water quality grade

international evidence on the persistence of economic fluctuations abstract this paper presents new evidence on the persistence of fluctuations in real gnp we estimate two measures of persistence nonparametrically using post war quarterly data from canada france germany italy japan the united kingdom and the united states we compare these estimates with monte carlo results from various ar 2 processes for six out of seven countries the point estimates indicate that a 1 shock to output should change the long run unvariate forecast of output by well over 1 low order arma models yield similar conclusions finally we examine the persistence in relative outputs of different countries

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

the phillips curve the persistence of inflation and the lucas critique evidence from exchange rate regimes comment we present evidence from the united states and the united kingdom that the persistence of price inflation is significantly higher under managed exchange rate regimes than under gold based fixed exchange rate regimes these differences are also reflected in expectations augmented phillips curves we use a two country macro model with forward looking price setters to demonstrate that higher monetary accommodation of inflation and exchange rate accommodation of inflation differentials increase inflation persistence the evidence does not contradict this hypothesis it supports the hypothesis of forward looking price setters and highlights the empirical significance of the lucas critique jel e31 e42 f33

international real business cycles we ask whether a two country real business cycle model can account simultaneously for domestic and international aspects of business cycles with this question in mind we document a number of discrepancies between theory and data the most striking discrepancy concerns the correlations of consumption and output across countries in the data outputs are generally more highly correlated across countries than consumptions in the model we see the opposite

what do property values really tell us a hedonic study of underground storage tanks hedonic property value models are widely used but are susceptible to potentially invalid conjectures based on the assumed measure of environmental quality this paper focuses on an application where this is of particular concern leaking underground storage tanks i estimate a hedonic model using quasi experimental and spatial econometric techniques similar to previous studies i examine how house prices vary with distance to the disamenity this approach yields little evidence that prices are adversely impacted however to better measure risks i utilize home specific data on groundwater well tests and correspondence from regulators and find an 11 depreciation when households are well informed