benefits and ancillary costs of natural infrastructure evidence from the new jersey coast abstract this paper empirically estimates the economic impacts of a large scale public investment in natural infrastructure aimed at adapting to climate change and increasing coastal resilience i utilize temporal and spatial variation in investment in dunes to provide a hedonic property value estimate of the economic benefits i identify the net effect of treatment utilizing the doubly robust oaxaca blinder estimator and show that coastal housing price increases attributable to constructed dunes are approximately 3 6 a decomposition of the average impact suggests that the policy intervention generates ancillary costs related to impaired ocean views and privacy concerns that partially offset large protection benefits

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

combining revealed and stated preference methods to value environmental amenities at residential locations this paper combines an established revealed preference method discrete choice he donic analysis and a relatively new stated refer ence method choice based conjoint analysis in order to estimate more accurately the aesthetic benefits generated by the presence and quality of environmental amenities associated with residen tial locations it applies the combined approach to the housing market of fairfield connecticut which contains several environmental amenities and is experiencing an improvement in the quality of its coastal wetlands due to active restoration efforts jel q26

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

capital theory and the origins of the elasticity of substitution 1932 35 elasticity of substitution was introduced into economics during the early 1930s it was discovered independendy by hicks in the theory of wages and by joan robinson in the economics of imperfect competition and then was the centre of a polemic involving kahn and sraffa among others the debate focused on imperfect competition and capital theoretical issues some elem ents of the 1950s and 1960s capital theory controversy such as the idea of capital as a giffen good or the difficulties of measuring capital were already discussed at this early stage

beach nourishment as a dynamic capital accumulation problem abstract beach nourishment is a common coastal management strategy used to combat erosion along sandy coastlines it involves building out a beach with sand dredged from another location this paper develops a positive model of beach nourishment and generates testable hypotheses about how the frequency of nourishment responds to property values project costs erosion rates and discounting by treating the decision to nourish as a dynamic capital accumulation problem the model produces new insights about coupled economic geomorphological systems in particular determining whether the frequency of nourishment increases in response to physical and economic forces depends on whether the decay rate of nourishment sand exceeds the discount rate

directional heterogeneity in distance profiles in hedonic property value models abstract in environmental economics hedonic property value hpv models have often employed distance from a localized environmental disamenity as a proxy for perceived risk the magnitude of a distance effect on housing prices however may depend upon the direction in which it is being measured we generalize conventional distance models to allow for continuously varying directional effects by converting from cartesian to polar coordinates a simple empirical example for housing prices around woburn massachusetts between 1988 and 1996 illustrates how failure to allow for directional heterogeneity can obscure otherwise statistically significant distance effects in hpv

the comparison between ad valorem and specific taxation under imperfect competition abstract this paper compares ad valorem and specific taxation in two models of oligopoly with and without free entry predominantly ad valorem taxation implies a relatively low consumer price high tax revenue and when entry is precluded low profits ad valorem taxation dominates specific taxation from the welfare perspective the set of circumstances under which with free entry specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare improving and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation

hedonic amenity valuation and functional form specification this paper uses gis data to develop variables representing the physical extent and visibility of surrounding land use cover features in a hedonic model of a rural suburban residential housing market three equations are estimated to determine if views

flood risk and salience new evidence from the sunshine state a growing literature finds evidence that flood risk salience varies over time spiking directly following a flood and then falling off individuals cognitive radar in the following years in this article we provide new evidence of salience exploiting a hurricane cluster impacting florida that was preceded and followed by periods of unusual calm utilizing residential property sales across the state from 2002 through 2012 our main estimate finds a salience impact of 8 on average the salience effect persists when we base estimation only on spatial variation in prices to limit confounding from other simultaneous changes due to shifting hedonic equilibria over time these effects range from housing prices decreases of 5 4 12 3 depending on the year of sale understanding flood risk salience has important implications for flood insurance and disaster policy the benefits transfer literature and more broadly our understanding of natural disaster resilience

the impact of a soda tax on prices evidence from french micro data abstractbased on an original data set of more than 500 000 non alcoholic beverage price records we evaluate the impact on consumer prices of the soda tax an excise on drinks with added sugar or sweetener introduced in france in january 2012 we adopt a difference in differences approach and find that the tax was gradually passed through to the prices of the taxed beverages after 6 months of its introduction it was fully shifted to soda prices and almost fully shifted to the prices of fruit drinks while the pass through for flavoured waters was incomplete we also find that the pass through was heterogeneous across brands and retail groups

viewscapes and flood hazard coastal housing market response to amenities and risk coastal amenities and risk are so highly correlated that separate identification within the hedonic framework is potentially challenging in this study we construct a three dimensional measure of ocean view viewscape accounting for natural topography and built obstruction that varies independent of risk classification to disentangle these spatially integrated housing characteristics a spatial autoregressive hedonic model is developed to provide consistent estimates of the willingness to pay for coastal amenities and risk our findings suggest that incorporating the gis based view measures can be successful in isolating risk factors from spatial amenities

low income housing in high amenity areas long run effects on residential development centre left governments from the 1940s into the 1970s developed several large areas in the urban fringe of dunedin new zealand for low density mostly single family public rental housing the public housing in these areas is now accessible well endowed with natural amenities and allocated to very low income households analysis of the spatial variation in natural amenities with that of household incomes and house characteristics suggests large scale effects of the public housing developments diversion of higher income housing to other suburban areas and possibly maintenance of older high quality housing in central areas interestingly centre right governments may have opened the door to market forces by encouraging tenants to purchase their public rental house we find evidence that recent general increases in house prices have encouraged relatively high income households to purchase ex state rentals in these high natural amenity areas

marshall s theory of value the role of external economies the view that marshall relied upon the assumption of external economies in his attempt to reconcile the existence of competition and decreasing long run average costs continues to attract many supporters however it is argued here that in marshall s writings external economies were to play only a very minor role in the reconciliation exercise subsequent writers emphasis on the role of external economies is shown to reflect a lack of understanding of the object of marshall s as opposed to the marshallians reconciliation problem

bridging the gap between revealed and stated preferences in flood prone housing markets abstract this papers attempts to shed light on the gap between revealed and stated preferences methods in flood prone housing markets we quantitatively explore the market level consequences of various behavioural models assumptions regarding risky choices at the individual level in addition we quantify the effect of the market level bias in risk valuation that individual preferences for neighbourhood quality imply we apply an economic agent based housing market model to quantify and disentangle the impacts of behavioural biases in individual decisions under risk as well as neighbourhood externalities which both are known to distort markets we compare three different micro level behavioural risk models expected utility prospect theory and risk negligence the flood risk discount on a market level varies significantly but the results do not rule out any of these models in general markets with prospect theory traders overprice risks causing an unrealistically high price differential between risk prone and risk free properties the marginal implicit price for flood risk is much closer to empirically found prices in the expected utility and risk negligence models additionally we find that individual preferences for neighbourhood quality and multicollinearity in housing attributes can cause a bias in market level risk valuations of up to 9 7 of a property s value

who pays cigarette taxes the impact of consumer price search abstract we conduct an empirical study of the impact of consumer price search on the shifting of cigarette excise taxes to consumer prices we use novel data on the prices that smokers report paying and document substantial price dispersion we find that cigarette taxes are shifted at lower rates to carton buyers and especially smokers who buy cartons of cigarettes in a state other than their state of residence we also find evidence that taxes are shifted at somewhat lower rates to the prices paid by heavier smokers and at somewhat higher rates to the prices paid by smokers of light cigarettes

changes in implicit flood risk premiums empirical evidence from the housing market abstract hedonic valuation models have shown that sales prices can capitalize property risk factors such as flood zone properties facing lower risk sell at a premium all else being equal previous research has indicated that price differentials reflecting risk of flooding become much larger in the wake of a storm we re examine these findings for pitt county north carolina using multiple storm events within a difference in differences framework and we compare flood zone price differentials for a more recent sample of property sales prior to hurricane fran in 1996 we detect no market risk premium for the presence in a flood zone but we find significant price differentials after major flooding events amounting to a 5 7 decrease after hurricane fran and 8 8 decrease after hurricane floyd results from a separate model that examines more recent data covering a period without significant storm related flood impacts indicate a significant risk premium ranging between 6 0 and 20 2 for homes sold in the flood zone but this effect is diminishing over time essentially disappearing about 5 or 6 years after hurricane floyd the lack of a persistent effect suggests that buyers and sellers risk perceptions may change with the prevalence of hazard events and that homebuyers are unaware of flood risks and insurance requirements when bidding on properties

reference prices costs and nominal rigidities we assess the importance of nominal rigidities using a new weekly scanner dataset we find that nominal rigidities take the form of inertia in reference prices and costst defined as the most common prices and costs within a given quarter reference prices are particularly inertial and have an average duration of roughly one year even though weekly prices change roughly once every two weeks we document the relation between prices and costs and find sharp evidence of state dependence in prices we use a simple model to argue that reference prices and costs are useful statistics for macroeconomic

does policy process influence public values for forest water resource protection in florida abstract forest ecosystems play a critical role in protecting water resources yet the neoclassical stated preference assumption is that willingness to pay wtp for forest conservation is solely a function of the ecosystem services provided by these lands thus little attention has been paid to the importance of policy processes as potentially influential drivers of wtp using a statewide web based survey in florida us and a relatively novel valuation approach i e best worst choice we examine public preferences for clean water benefits e g recreation drinking water resources as well as common conservation policy processes such as land acquisition and financial assistance for landowners we found forest water protection programs provide an annual average of 154 230 million in clean water benefits and a significant portion of that value was associated with the policy process attitudes and beliefs about whom forests should be managed for and who should manage forests were also found to influence wtp behaviors we conclude that including policy process information in the valuation survey allows respondents to better determine changes in utility among realistic policy alternatives our findings have important implications for wtp estimation techniques and public participation in environmental policy design

tax incidence with strategic firms in the soft drink market abstract because soft drink sd consumption is considered to be a contributor to the epidemic of obesity there is a growing interest in evaluating the impact on sd consumption of alternative tax policies in this paper we propose a methodology to evaluate the impact of taxation of a food market taking into account the strategic price response of both manufacturers and retailers we apply this methodology to the french sd market and simulate the impacts of ad valorem and excise taxes we find that firms behave differently when facing an ad valorem tax or an excise tax an excise tax is overshifted to consumer prices while an ad valorem tax is undershifted to consumer prices we find that an excise tax based on the sugar content of sd is the most effective at reducing sd consumption our results also indicate that ignoring strategic pricing by firms leads to misestimations of the impact of taxation by between 15 and 40 depending on the products and the tax implemented in the short term that is ignoring positive long term health effects a 9 cents l excise tax has a small negative welfare effect about 1 person year

the assumption of constant returns to scale nicholas kaldor was right to maintain that this assumption is unrealistic but that does not mean that it is useless there are propositions that can be proved assuming it which would never have been found without it but that look as if they are independent of it two examples 1 paul samuelson s factor price equalization theorem in international trade and 2 the author s theory of relations between factors in production elasticity of substitution in a modern form p and q substitutes complements must be distinguished weakly related factors are p substitutes and q complements this is the only case when no more than two factors are present otherwise two factors out of many may be strong substitutes substitutes both ways or strong complements complements both ways the excluded case when they would be p complements and q substitutes appears in the presence of scale economies to be excluded a fortiori copyright 1989 by oxford university press

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

flooding risk and housing values an economic assessment of environmental hazard abstract climate change the boom and bust cycles of rivers and altered water resource management practice have caused significant changes in the spatial distribution of the risk of flooding hedonic pricing studies predominantly for the us have assessed the spatial incidence of risk and the associated implicit price of flood risk using these implicit price estimates and their associated standard errors we perform a meta analysis and find that an increase in the probability of flood risk of 0 01 in a year is associated to a difference in transaction price of an otherwise similar house of 0 6 the actual occurrence of a flooding event or increased stringency in disclosure rules causes ex ante prices to differ from ex post prices but these effects are small the marginal willingness to pay for reduced risk exposure has increased over time and it is slightly lower for areas with a higher per capita income we show that obfuscating amenity effects and risk exposure associated with proximity to water causes systematic bias in the implicit price of flood risk

economic valuation of environmental quality using property auction data a structural estimation approach this study proposes a method to economically evaluate environmental quality using property auction data our approach is consistent with microeconomic auction theory and can directly estimate the value function from the data a task that is often difficult when using conventional revealed preference methods such as the hedonic approach we use a method of simulated moments to estimate the value function which in turn is used to calculate the economic value of environmental quality changes we apply this method to data on foreclosure property auctions in tokyo in order to economically evaluate hypothetical improvements in neighborhood fire risks