economic and spatial effects of land value taxation in an urban area an urban computable general equilibrium approach this paper studies the effects of switching from a capital property tax to a land value tax using an urban computable general equilibrium model calibrated to the features of the atlanta georgia area our model differs from prior simulation studies in that we assume that residents own a fixed amount of land rather than assuming an absentee landowner we consider three income groups rather than just one we consider cases in which housing capital is not completely mobile and we allow for a labor leisure choice

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

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

do buyers characteristics and personal relationships affect agricultural land prices the influence of buyer and personal relationship characteristics on agricultural land prices has received little attention in the literature recently perry and robison 2001 used a restricted nonlinear specification to model the influence of personal relationships on the implicit prices of land characteristics in this paper a more flexible alternative model is proposed an approach to general model specification and model selection is presented the results indicate that buyer characteristics and personal relationships exert nonuniform effects on the implicit prices of land characteristics our results support the hypothesis that social capital affects the terms of trade in the land market

joint estimation of household and heat pump electricity demand statistical methods are applied to analyze metered heat pump and total household loads for residential dwellings the metered loads are combined with other information about the household to study usage patterns equipment energy use is a function of various determining factors and statistical methods are appropriate to reveal the underlying functional relationships a consequence of this approach is that extensive information on households should be gathered whenever metering studies are performed in order to facilitate econometric analysis of the data

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

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

urban sprawl and farmland prices a theoretical model of farmland valuation is developed to explicitly account for three effects of urban sprawl conversion of farmland to urban uses effect on agricultural returns and speculative effect as represented by farmland conversion risk this model is estimated using county level data in the continental united states evidence is found for all three effects of urban sprawl on farmland values counties more accessible to major urban centers have higher net agricultural returns subsidiary evidence supports that the latter effect may be attributed to survival of or conversion to high valued agriculture around urban centers

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

asymmetric all pay auctions with incomplete information the two player case abstract we prove existence and uniqueness of bayesian equilibrium for a class of generally asymmetric all pay auctions with incomplete information due to its importance in applications some prominence is given to the first price all pay auction for which a detailed characterization of equilibrium and an approximation to equilibrium of its well studied complete information version are supplied furthermore we relate our uniqueness result to the well known multiplicity of equilibria in the war of attrition second price all pay auction which emerges as a limit point of the class of two player auction games considered journalof economic literature classification numbers d44 c62 c72

dynamic demand for residential electricity in taiwan under seasonality and increasing block pricing abstract this paper studies the dynamic demand for residential electricity in taiwan employing a monthly panel data set composed of 19 counties and spanning the period from 2007 01 to 2013 12 the partial adjustment model used addresses the endogeneity of the electricity price that results from the increasing block pricing the estimated results show that there is a significant seasonal difference in the demand for electricity between the summer and non summer periods both the adjustment speed and own price elasticity during the summer months are found to be lower than those in the non summer months due to the hot weather in summer it is easier for consumers to adjust their electricity consumption in response to the changes in electricity pricing during the non summer time the estimated inelastic short run and long run income effects show that electricity is a necessity for consumers moreover the controversial electricity conservation policies are found to be ineffective measures for reducing electricity consumption in taiwan

the effects of potential land development on agricultural land prices abstract we conduct a national scale analysis of the determinants of agricultural land values the theoretical basis for the study is a spatial city model with stochastic returns to future land development the empirical model of agricultural land prices is estimated with a cross section on approximately three thousand counties in the contiguous us the results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values for each county we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development

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

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

some results on rent seeking contests with shortlisting we show that rent seeking contests with shortlistinghave comparative static properties which depend on thestage of the contest by generalising the argument inamegashie 1997 we show that well known comparativestatic results in single stage rent seeking contestsdo not necessarily carry over to contests withshortlisting the analysis suggeststhat policy prescriptions for reducing rent seekingexpenditures in contests with shortlisting cannot begiven without taking into account the stage of thecontest we also extend the model in amegashie 1997 to the case of unequal class sizes finally theshortlisting method in amegashie 1997 is comparedwith that in clark and riis 1996

estimating the demand for protecting freshwater lakes from eutrophication in any discussion of the valuation of public goods particularly environmental amenities contingent valuation travel cost and hedonics are commonly cited as methods for estimating hicksian or marshallian welfare freeman while contingent valuation and travel cost are widely employed we know of very few applications where hedonic demand functions have been estimated palmquist 1984 and parsons estimated second stage hedonic demands for characteristics of housing units both used the approach of estimating separate hedonic price functions for different real estate markets to identify demand parameters for housing characteristics the research reported here is the first to use separate real estate markets to identify demand parameters for an environmental amenity the specific application is water clarity in selected lakes in maine reduced water

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

dissipation of contestable rents by small numbers of contenders the theory of rent seeking with its origins in the observations of gordon tullock 1967 or to use jagdish bhagwati s 1982 proposed term the theory of directly unproductive profit seeking activities is concerned with the potentially adverse effects on resource allocation of incentives to cap ture and defend artificially contrived rents and transfers the scope for so cial loss proposed by the theory derives from the relation between the value of a contestable prize and the value of the resources attracted into the con test to determine the beneficiary of the prize underlying this social loss is a specification of how rational behavior by optimizing agents links the value of the prize sought to the resources expended it has been traditional to assume competitive behavior in describing the activities of lobbying and influence seeking then if some further condi tions are satisfied l the total value of the resources expended precisely equals the value of the prize sought so dissipation is complete 2 conse quently the social cost associated with contestability of a rent can be in ferred from the value of the rent itself and the detailed and hard to come by information on individual outlays made in the course of the contest be comes unnecessary by basing their analyses on competitive dissipation contributors to the rent seeking literature see the review by robert tollison 1982 have been able to presume that the observed value of a contested rent is an exact measure of the associated social cost of monopoly power or regu lation similarly in the trade theoretic literature where the rights contested are to quota premia or revenues from trade taxes krueger 1974 bhagwati

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

the design of rent seeking competitions in the standard tullock model of rent seeking as a noncooperative game aggregate expenditures by seekers can equal exceed or fall short of total rents depending on what is assumed about the number of seekers and the marginal return to a seeker s investment if the supply of an input into the rent seeking process is controlled by a politician who receives payment from seekers for it the indeterminacy of the process becomes a less serious problem he supplies it and designs the rent seeking game to maximize his wealth the author derives expressions for the number of seekers and the marginal return parameter which maximize the politician s wealth in one input and two input rent seeking processes

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

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

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

a national micro data based model of residential electricity demand new evidence on seasonal variation building on earlier estimates of electricity demand the author estimates elasticities by month to determine differences between heating and cooling seasons he develops a three equation model of residential electricity demand that includes all the main components of economic theory the model generates seasonal elasticity estimates that generally support economic theory based on the model using a national current household data set monthly division the evidence indicates there is a seasonal pattern for price elasticity of demand while less pronounced there also appears to be seasonal patterns for cross price elasticity of alternative fuels for the elasticity of appliance stock index and for an intensity of use variable

domestic fuel expenditure an analysis of three national surveys abstract this paper analyses the fuel expenditure data in three surveys looking particularly at the importance of household income multivariate data analysis techniques show that household size the size and type of accomodation and the presence of central heating are more direct influences on fuel expenditure than income changes in income have little independent effect on fuel expenditure once the size of the house size of household and heating system are determined

seasonal variation in residential electricity demand evidence from survey data in this paper we estimate twelve monthly electricity demand equations for households using a detailed microdata set the microdata are based largely on a detailed 1975 survey of us households and incude variables enabling us to measure block price schedules family income socio demographic variables appliance stocks housing characteristics and heating and cooling degree days of single family units we find that price elasticities are higher in absolute value during peak periods of demand income elasticity estimates show no discernible seasonal pattern our disaggregated data also allow us to estimate the seasonal usage patterns of several electricity using appliances the estimates follow expected patterns

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

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

can stigma explain large property value losses the psychology and economics of superfund this research documents the long term impacts of delayed cleanup on property values in communities neighboring prominent superfund sites the research examines the sale prices of nearly 34 000 homes near sites in three metropolitan areas for up to a 30 year period to our knowledge no other property value studies have examined sites in multiple areas with large property value losses over the length of time used here the results are both surprising and inconsistent with most prior work the principal result is that when cleanup is delayed for 10 15 and even up to 20 years the discounted present value of the cleanup is mostly lost a possible explanation for these property value losses is that the sites are stigmatized and the homes in the surrounding communities are shunned the results suggest that expedited cleanup and minimizing the number of stigmatizing events would reduce these losses

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

effect of urban proximity on agricultural land values this article seeks to more accurately estimate the size and distance of the effect of urban proximity on agricultural land values the econometric model lets the size and distance of the effect of urban proximity on agricultural land values vary by population real income and time the changes in the effect of urban proximity over time can be largely explained by population and income thus there does not appear to be a shift in preferences toward living further from the city center

patent competition rent dissipation and the persistence of monopoly the role of research budgets abstract the paper investigates how patent rights can contribute to the persistence of monopoly patent competition is modelled as a dollar auction game between two firms incumbent and entrant any bid expenditure on r d in the game constitutes sunk cost whose total amount is constrained by fixed research budgets the explicit solution subgame perfect equilibrium determines who wins the patent and how the winning expenditures depend on order of play and budgets of firms the entrant can win if he moves first and has the higher budget rent may or may not be dissipated by the competition

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

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 optimal allocation of prizes in contests we study a contest with multiple not necessarily equal prizes contestants have private information about an ability parameter that affects their costs of bidding the contestant with the highest bid wins the first prize the contestant with the second highest bid wins the second prize and so on until all the prizes are allocated all contestants incur their respective costs of bidding the contest s designer maximizes the expected sum of bids our main results are 1 we display bidding equlibria for any number of contestants having linear convex or concave cost functions and for any distribution of abilities 2 if the cost functions are linear or concave then no matter what the distribution of abilities is it is optimal for the designer to allocate the entire prize sum to a single first prize 3 we give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function

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

auctionin entry into tournaments a research tournament model with heterogeneous contestants is presented for a large class of contests the optimal number of competitors is two this insight makes designing the tournament easier and highlights the importance of selecting highly qualified contestants while customary uniform price and discriminatory price auctions are intuitively appealing mechanisms for solving this adverse selection problem in practice they generally will not be efficient mechanism for selecting contestants instead we propose an alternative auction format that is equally simple to implement and efficiently selects the most qualified contestants to compete regardless of the form of contestant heterogeneity

factors influencing illinois farmland values a hedonic model of illinois farmland values is estimated using county level cross section time series data explanatory variables include land productivity parcel size improvements distances to chicago and other large cities an urban rural index livestock production through swine operation scale and farm density measures population density income and inflation the inclusion of spatial and serial correlation components substantially improves the model fit farmland values decline with parcel size ruralness distance to chicago and large cities and swine farm density and increase with soil productivity population density and personal income

carrots and sticks prizes and punishments in contests i introduction contests are widely used to model political lobbying sports competitions job promotions and r d races in most cases the contest s organizer has some control over the structure of rewards and punishments teachers determine who passes and who fails the exam a company sets rules about promotions and layoffs and sport governing bodies choose the number of teams advancing to a higher league and the number of those relegated to a lower one in this paper we characterize the optimal prize structure in a contest where the designer can use both rewards carrots and punishments sticks in order to motivate participants to exert effort 1 although both rewards and punishments are part of many existing incentive contracts the literature on contests focused on the incentive role of rewards because a contest that uses some punishments can be replicated by one that uses only rewards and yields the same incentives but this equivalence breaks down if the contest designer faces a budget constraint and if both rewards and punishments are costly the main focus of the present paper is to study contest design when the designer is budget constrained and it is costly to punish or reward players costly punishments appear in many situations for example in labor tournaments a firm usually incurs costs when firing workers who perform poorly e g worker compensation production disruption loss of clients and usually face search and replacement costs e g think about a faculty denying tenure to some candidates in other instances punishments are less costly to implement e g relegation in sport tournaments and we also briefly deal with this set up we assume here that the designer has a limited budget which means that costly punishments cannot be arbitrarily high subject to her budget constraint the designer determines the number and size of prizes punishments in order to maximize the participants expected total effort in particular some prizes can be positive rewards or negative punishments given the prize structure players choose their effort levels in order to maximize their expected payoff it is important to note that in a contest with n participants the marginal effect of each of n prizes on the participants total effort is different and can be either positive or negative if the marginal effect of the k th prize is positive its value given a budget constraint should be positive reward or zero and if the marginal effect is negative its value should be negative punishment or zero thus given that the contest designer has a limited budget he will prefer to distribute the entire prize sum to the prize with the highest marginal effect on the participants total effort relative to its cost in this paper we show that the relative effectiveness of punishments compared to rewards crucially depends on the curvature of the distribution of player abilities exploiting results about normalized spacings among order statistics developed by barlow and prochan 1966 we first revisit one of the main results in moldovanu and sela 2001 if punishment is not feasible the optimal prize structure offers a single reward to the top performer if rewards are not feasible we then show that the designer should only punish the player with the lowest performance if the distribution of abilities has an increasing hazard or failure rate if this last condition is not satisfied more punishments may be optimal if the designer can punish as well as reward the optimal prize structure will depend on the relative marginal cost of punishments and on the distribution of the players abilities for example if the marginal cost of punishments is the same as the marginal cost of rewards it is optimal to punish the worst performing player if the distribution of abilities is convex if that player is punished even high types will work hard to avoid performing worst because they know that there is a relatively high probability that competitors also have high types

rigging the lobbying process an application of the all pay auction textabstractin a world where a politician can explicitly auction off a prize to the high bidder the standard auction literature can be used to analyse political behavior the justice system however precludes politicians from explicitly selling the prize to the highest bidder thus politicians cannot let it become public knowledge that they are in the business of selling political favors an institution has emerged in political markets to overcome this constraint which are termed as lobbying lobbyists make implicit payments to the politician through campaign contributions if these up front payments were rebated to those failing to receive the prize it would be clear that the politician was selling favors this article has examined an interesting principle arising in all pay auctions this principle states that a politician wishing to maximize political rents may find it in his best interest to exclude certain lobbyists from participating in the lobbying process particularly lobbyists valuing most the political prize

appliance specific electricity consumption in slovene households abstract on the basis of a national household survey carried out in 1983 this study presents estimates of electricity use per appliance our estimates of electricity use for space heating water heating and cooking are considerably lower than the engineering estimates the estimates for other electricity using appliances broadly conform with engineering estimates our low estimate of the short run income elasticity is in close agreement with other studies

forecasting open space with a two rate property tax a two rate property tax tpt imparts different tax rates on land and structures a hypothetical tpt is evaluated as an instrument to promote open space preservation the potential tpt effects on open space equilibrium levels were compared with simulated equilibrium levels reflecting the tpt policy shock ex ante results suggest that equilibrium open space levels were positively displaced following a revenue neutral tax policy on land about 76 of the households valued open space more following a land value tax rate of 9 04 which suggests that households in certain locations are likely to support programs or policies preserving open space

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

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

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

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

multi stage sequential all pay auctions abstract we study multi stage sequential all pay contests auctions where heterogeneous contestants are privately informed about a parameter ability that affects their cost of effort we characterize the perfect bayesian equilibrium of these contests and analyze the effect of the number of contestants and their types on the contestants expected highest effort

hedonic valuation of farmland using sale prices versus appraised values farmland provides agricultural products and natural amenities as well as residential sites the emergence of exurbanization appears to be changing the demand for natural amenities and their role in determining land values to better understand how appraised value and sale price capture the determinants of farmland value in a region facing exurbanization this study applies the hedonic method to land transaction data in southwestern michigan during 2003 2007 results suggest that appraised values are a poor substitute for sale prices if the research goal is to understand dynamically evolving determinants of land value in exurbanizing regions especially the value of natural amenities

all pay contests this paper studies a class of games all pay contests which capture general asymmetries and sunk investments inherent in scenarios such as lobbying competition for market power labor market tournaments and r d races players compete for one of several identical prizes by choosing a score conditional on winning or losing it is weakly better to do so with a lower score this formulation allows for differing production technologies costs of capital prior investments attitudes toward risk and conditional and unconditional investments among others i provide a closed form formula for players equilibrium payoffs and analyze player participation a special case of contests is multiprize complete information all pay auctions

the design of rent seeking competitions committees preliminary and final contests the paper examines the common practice in multi contest rent seeking competitions where finalists are selected based on rent seekers efforts in a preliminary contest we find that for any single contest design rent seeking expenditures could be reduced by introducing a preliminary contest if the marginal returns to rent seeking effort in the preliminary contest is sufficiently low in addition to other reasons the paper argues that this may explain why such multi contest designs are common we argue that rent seeking expenditure in the preliminary stage represents the cost of reducing the number of contestants we also find that the practice of setting a higher quality standard in the final contest than the quality standard in the preliminary contest reduces rent seeking waste we derive an expression for the optimal number of finalists under certain conditions we find that the optimal number of finalists is directly proportional or equal to the square root of the number of potential contestants finally we show that whether rent seeking expenditures rise or fall when the rent is awarded by a committee instead of a single administrator depends on the sensitivity of the committee relative to that of the single administrator

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

residential demand for electricity under inverted block rates evidence from a controlled experiment block rate structures are used extensively in public utility pricing including residential electricity estimating price elasticities in this context is complicated by the resulting nonlinearity of the consumer s budget constraint this article estimates the demand for electricity under inverted block rates using data from a residential rate experiment the study provides an opportunity to obtain short run price elasticities in an experimental setting and to compare alternative estimators developed for nonlinear budget constraints elasticities of demand with respect to individual components of the block rate are developed using a modification of the structural maximum likelihood estimator

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

an engineering econometric analysis of seasonal energy demand and conservation in the pacific northwest this article estimates a new model of residential electricity demand it differs from previous work in two ways first we use individual monthly billing data in a pooled time series cross section framework second we use an engineering thermal load technique to model the household space heating technology we estimate the model using data from the pacific northwest and use the results to analyze three conservation measures a price increase a reduction in thermostat settings and improvement of insulation levels we find average rates of return for insulation upgrades of 4 9 for ceilings and 8 3 for walls

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

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

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

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

the fundamentals of land prices and urban growth abstract in a very simple model in which capital is durable and landowners have perfect foresight the price of urban land has four additive components the value of agricultural land rent the cost of conversion the value of accessibility and the value of expected future rent increases a growth premium in rapidly growing cities the growth premium may easily account for half of the average price of land and may create a large gap between the price of land at the boundary minus conversion cost and the value of agricultural land rent

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

contests with three or more heterogeneous agents abstract we study monotone equilibrium behavior in contests with observable effort bid where three or more participants have distinct risk attitudes and the monetary value for the prize of each is drawn independently from a distinct distribution these differences can either cause a player to drop out that is always choose zero effort regardless of his valuation or use all or nothing strategies with discontinuous effort choice neither complete drop out nor discontinuous bidding with finitely many gaps is consistent with pure strategy monotone bayesian nash equilibrium in a contest with either ex ante identical players or only two distinct participants

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

consumer responses to time varying prices for electricity abstract we report new experimental evidence of the household response to weekday differentials in peak and off peak electricity prices the data come from auckland new zealand where peak residential electricity consumption occurs in winter for heating peak off peak price differentials ranged over four randomly selected groups from 1 0 to 3 5 on average there was no response except in winter in winter participant households reduced electricity consumption by at least 10 took advantage of lower off peak prices but did not respond to the peak price differentials response varied with house and household size time spent away from home and whether water was heated with electricity

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

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

an analysis of the war of attrition and the all pay auction we study the war of attrition and the all pay auction when players signals are affiliated and symmetrically distributed we a find sufficient conditions for the existence of symmetric monotonic equilibrium bidding strategies and b examine the performance of these auction forms in terms of the expected revenue accruing to the seller under our conditions the war of attrition raises greater expected revenue than all other known sealed bid auction forms journal of economic literature classification numbers d44 d82 1997 academic press

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