market shares and price quality relationships an econometric investigation of the u s automobile market the objective of this paper is to investigate the role of marketing competition in the northamerican automobile market this is accomplished by estimating a market share demand function the main difficulty with the analysis of demand for automobiles is heterogeneity of model types quality differences among different models both at a point in time and through time cannot be ignored since price and sales depend on them one way to remedy this situation is to apply the hedonic method by regressing the price of a model on its characteristics in this way the implicit prices for each of the qualitative attributes are derived and then used free of quality differences in the second stage estimation of a market share demand function there has been considerable interest in estimating demand functions for automobiles however most of the previous research has focused on total automobile demand in this approach equations on total sales are estimated without taking into account differences in quality characteristics of different model types these studies usually relate the depreciation of the service level of the currently held stock of automobiles to the demand for new stock this leads to a very general stock adjustment 7 or generalized acceleration framework 10 the best known time series studies of the aggregate automobile demand using different variants of this approach are those of chow 2 suits 15 wykoff 19 and westin 18 the estimates of price elasticities from these studies are about 1 and income elasticities range from 1 5 to 4 previous research on automobile demand allowing for qualitative differences in characteristics among different models is much less extensive the most important research effort in this direction is the paper by cowling and cubbin 4 they explained market share movements for different car manufacturers by changes in quality adjusted prices using data from england for the period 1957 1968 their quality adjusted price vector is proxied by the residuals from hedonic price regressions using the data on manufacturer s models the idea that the residuals from the regression of prices of differentiated goods on their qualitative attributes are the quality adjusted prices was suggested by griliches 8 cowling and cubbin used as their quality adjusted price for a specific manufacturing firm the mean residual computed by taking into account all the models offered by

federal timber restrictions interregional spillovers and the impact on us softwood markets abstract an econometric model of the us softwood lumber and timber markets is estimated and used to simulate the price trade and welfare effects of reductions in federal timber sales in the western us commencing in the late 1980s results indicate that the timber sale reductions increased lumber prices by roughly 15 percent in the mid 1990s lumber consumers were the unambiguous losers from the policy while lumber and timber producers were net welfare gainers as the quantity induced losses to western lumber producers were more than offset by price increases and quantity gains to southern us and canadian lumber producers and timber producers in all regions

new hedonic technique for estimating attribute demand an application to the demand for automobile fuel efficiency a new hedonic procedure is applied to estimate the effects of gasoline price on the demand for automobile attributes and fuel efficiency direct application of a comparative statics analysis circumvents the problems of identification and severe multicollinearity affecting previous hedonic studies the results indicate that the effect of induced changes in automobile attributes in response to increases in the price of gasoline is to substantially increase fuel efficiency the estimated elasticities of fuel efficiency with respect to the price of gasoline imply that the long run own price elasticity of demand for gasoline is greater than unity 31 references

a simple search model with procyclical quits abstract a simple two state model of search is constructed which consistent with empirical studies engenders procyclical quits

welfare measurement for environmental improvements using the hedonic model the case of nonparametric marginal prices abstract research in environmental and natural resource economics frequently requires the use of hedonic models because of the differentiated products involved this is true for studies of the relationship between environmental quality and property values or wages or between the characteristics of a recreation site and the demand for its services an obvious use of such studies is in estimating willingness to pay for improvements with differentiated products there are usually nonlinear hedonic price schedules and thus nonlinear budget constraints this makes welfare analysis difficult because standard duality results no longer hold this paper develops a technique for estimating a psuedo demand system that can be used to derive exact measures of consumer welfare change similar techniques are developed for producers with a psuedo profit function that can be converted to an exact measure of the change in quasi rents or rents the paper also shows that the distance function can be used to develop an ex ante measure of welfare change

are unemployment and out of the labor force behaviorally distinct labor force states this paper tests the hypothesis that the classifications unemployed and out of the labor force are behaviorally meaningless distinctions this hypothesis is rejected distinct behavioral equations govern transitions from out of the labor force to employment and from unemployment to employment the evidence reported in this paper is broadly consistent with versions of search theory in which unemployment is a state that facilitates the job search process in an appendix we demonstrate that log concavity of the wage offer distribution implies that the exit rate from unemployment is an increasing function of the rate of arrival of job offers

search theoretic models of the labor market a survey we survey the literature on search theoretic models of the labor market we show how this approach addresses many issues including the following why do workers sometimes choose to remain unemployed what determines the lengths of employment and unemployment spells how can there simultaneously exist unemployed workers and unfilled vacancies what determines aggregate unemployment and vacancies how can homogeneous workers earn different wages what are the tradeoffs firms face from different wages how do wages and turnover interact what determines efficient turnover we discuss various modeling choices concerning wage determination and the meeting process including recent models of directed search

beyond implicit prices recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model using a two stage hedonic pricing methodology we estimate a system of structural demand equations for different sources of transport related noise in the first stage we identify market segments using model based clustering techniques and estimate separate hedonic price functions hpfs for each segment in so doing we show how a semiparametric spatial smoothing estimator outperforms other standard specifications of the hpf in the second stage we control for non linearity of the budget constraint and identify demand relationships using techniques that account for problems of endogeneity and censoring of the dependent variable our estimated demand functions provide welfare estimates for peace and quiet that we believe to be the first derived from property market data in a theoretically consistent manner

job search and asset accumulation under borrowing constraints this article examines the relationship between wealth accumulation and job search dynamics it proposes a model in which risk averse individuals search for jobs save and borrow to smooth their consumption one motivation for accumulating wealth is to finance voluntary quits in order to search for better jobs using data on men from the national longitudinal survey 1979 cohort i estimate the individual s dynamic decision problem the results show that borrowing constraints are tight and reinforce the influence of wealth on job acceptance decisions namely that more initial wealth and access to larger amounts of credit increase wages and unemployment duration

a nonlinear approach to us gnp a univariate nonlinear model is estimated for us gnp that on many criteria outperforms standard linear models the estimated model is of the threshold autoregressive type and contains evidence of asymmetric effects of shocks over the business cycle in particular the nonlinear model suggests that the post 1945 us economy is significantly more stable than the pre 1945 us economy

real wages over the business cycle evidence from panel data one topic on which keynes did not disagree with classical economists was the cyclical behavior of real wages keynes 1936 as well as various classical writers predicted that real wages should move countercyclically quoting the general theory p 17 in general an increase in employment can only occur through the accompaniment of a decline in real wages thus i am not disputing this vital fact which the classical economists have rightly asserted as indefeasible this prediction is based on the premise of competition and a given short run capital stock increases in employment then correspond to more intensive use of capital and through diminishing product lower real wages for this reason evidence by dunlop 1938 and tarshis 1939 that real wages move procyclically was viewed as paradoxical both dunlop and tarshis based their findings on an observed positive correlation between real and money wages which given the procyclical movement of money wages implies a positive correlation between

how changes in labor demand affect unemployed workers this study analyzes the manner in which certain favorable shifts in labor demand affect job search although all shifts increase reservation wages they do not necessarily decrease expected unemployment spell durations and increase expected post unemployment wages so that upward sloping short run phillips curves may occur a result due to chamberlain is used to demonstrate that if the wage offer distribution is restricted to be logconcave two of the shifts guarantee downward sloping phillips curves for one of these two shifts previous research by flinn and heckman used logconcavity in a different manner to achieve properly shaped phillips curves

asymmetry in farm retail price transmission for major dairy products an econometric model is used to estimate the net relationship between changes in the farm level price of milk and changes in the retail prices of four major dairy products fluid milk butter cheese and ice cream results indicate that the farm retail price transmission process in the dairy sector is asymmetric retail dairy product prices adjust more rapidly and more fully to increases in the farm price of milk than to decreases the role in pricing asymmetry of retail demand versus farm supply shifts is tested via a chow type test asymmetry is tested using the houck procedure for estimating nonreversible functions

unemployment rate dynamics and persistent unemployment under rational expectations this paper develops a model of unemployment rate dynamics that provides an explanation of persistent cyclical unemployment that does not involve persistent expectational errors or other nonoptimizing behavior our results are based on the interaction of search dynamics and inventory adjustments an important element in these dynamics appears to be heterogeneity in the labor force which can be characterized as consisting of a relatively small group of high turnover individuals who comprise the bulk of normal unemployment and a larger group of low turnover individuals who dominate movements in cyclical unemployment our empirical results provide support for this theory as we demonstrate that the appropriately measured probability of becoming employed during a recovery falls relative to normal because of the unusually high proportion of low turnover individuals who have lost permanent jobs as aresult recovery is much slower than is indicated by normal relationships although each individual is searching optimally this abstract was borrowed from another version of this item

demand equations for individual new car models estimated using transaction prices with implications for regulatory issues the economic impact of the automobile industry on the u s economy hardly needs to be emphasized taking into account related and feeder industries such as rubber steel zinc it has been estimated that one business in six is automobile related over the last 20 years the auto industry has been subject to increasing regulation laws have been passed which require manufacturers to install certain safety equipment and pollution control equipment and recently have mandated that fuel efficiency cafe standards be met on average by the fleet of cars sold by each manufacturer 2 the impact of these cafe standards is enormous currently the domestic auto manufacturers have plans to spend over 40 billion dollars to essentially redesign all of their models 3 the effects all these regulations have had and will have on the health and structure of the u s automobile industry has been the subject of much debate auto manufacturers have argued that 1 consumers do not value the safety and pollution control equipment and that therefore the expense of such equipment merely hurts their sales 4 and 2 due to the differential ability of the four major auto companies to meet any given standard the imposition of them disrupts the competitive market relationships which exist between the companies advocates of these regulations on the other hand view the u s auto industry as resisting change in order to protect its profits

on the extent of the market wholesale gasoline in the northeastern united states this paper develops the classical view of the extent of markets by introducing explicitly in the analysis the concept of arbitrage costs arbitrage or transaction costs imply that market boundaries are essentially stochastic while a set of products or regions may have binding arbitrage conditions i e may be in the same market at a given point in time they may not at another thus in defining a market the probability that a set of agents or regions would h3ve binding arbitrage conditions has to be assessed this paper develops an econometric methodology to estimate the transaction costs required to arbitrage among a given set of products as well as the probability that that set of products would be bound by binding arbitrage condi tions finally the methodology is applied to wholesale gasoline in the northeastern part of the united states address for communications pablo t spiller herbert hoover memorl l bldg 9348 stanford ca 94305

econometric models of asymmetric price transmission abstract in this paper we review the existing empirical literature on price asymmetries in commodities providing a way to classify and compare different studies that are highly heterogeneous in terms of econometric models type of asymmetries and empirical findings relative to the previous literature this paper is novel in several respects first it presents a detailed and updated survey of the existing empirical contributions on price asymmetries in the transmission mechanism linking input prices to output prices second this paper presents an extension of the traditional distinction between long run and short run asymmetries to new categories of asymmetries such as contemporaneous impact distributed lag effect cumulated impact reaction time equilibrium and momentum equilibrium adjustment path regime effect regime equilibrium adjustment path each empirical study is then critically discussed in the light of this new classification of asymmetries third this paper evaluates the relative merits of the most popular econometric models for price asymmetries namely autoregressive distributed lags partial adjustments error correction models regime switching and vector autoregressive models finally we use the meta regression analysis to investigate whether the results of asymmetry tests are not model invariant and find which additional factors systematically influence the rejection of the null hypothesis of symmetric price adjustment the main results of our survey can be summarized as follows i each econometric model is specialized to capture a subset of asymmetries ii each asymmetry is better investigated by a subset of econometric models iii the general significance of the f test for asymmetric price transmission depends mainly on characteristics of the data dynamic specification of the econometric model and market characteristics overall our empirical findings confirm that asymmetry in all its forms is very likely to occur in a wide range of markets and econometric models

an equilibrium model of quits under optimal contracting abstract this article develops an equilibrium model of quits in a labor market and examines the effect of contracting under asymmetric information when compared with symmetric information and noncontractual base lines we demonstrate that quits increase in periods of high output without postulating exogenous price rigidity

hedonic prices for cars an application to the spanish car market 1981 2005 in this article we provide a comparison of different formulations for hedonic regression analysis in order to construct a quality adjusted price index for the spanish car market over the period 1981 to 2005 specifically we address the issue of instability of coefficients over time and propose two alternative estimation procedures based firstly on a moving sample of observations and secondly on a moving average of estimated coefficients in single period equations the statistical tests applied support the proposed methodologies on empirical grounds two conclusions can be emphasized firstly our study concludes that taking quality changes into account car prices in spain deflated by consumer price index cpi declined by 40 between 1981 and 2005 this result is robust to the alternative estimation procedures employed in the study secondly an analysis of convergence shows that for quality adjusted prices a clear trend in convergence emerges between 1986 and 1992 whereas such a trend does n

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

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

efficient estimation of hedonic inverse input demand systems this article is concerned with efficient estimation of characteristics demand we derive and estimate an inverse input demand system for quality characteristics by using 172 946 observations over 881 trading days in the icelandic fish auctions an improved estimation method based on an expanded random coefficient model is suggested as an alternative to the currently used two stage method of brown and rosen the estimates demonstrate the improved efficiency of the suggested method a number of empirical results emerge including a general increase in the demand for quality the purpose of hedonic price analysis is to determine how the price of a unit of a commodity varies with its characteristics that is to estimate the hedonic price function some recent examples of the estimation of hedonic price functions are nerlove combris lecocq and visser and mcconnell and strand however theory predicts that shifts in supply or demand affect the implicit price relationships between the overall price of the good and its individual characteristics and so we need to estimate the underlying demand and supply functions for the characteristics rosen developed a two stage method for analyzing hedonic markets in the first stage of this method the hedonic price function is estimated and in the second stage a system of demand and supply functions for characteristics is estimated using the shadow prices of the characteristics from the first stage as variables brown and rosen showed that this procedure could yield estimates of demand and supply functions that are mere transformations of the coefficients in the hedonic function they suggested the currently used two stage method using data from multiple markets this method utilizes the within market variation to iden

work rest and search unemployment turnover and the cycle this paper presents a model that generates procyclical search procyclical labor productivity and countercyclical unemployment broadly consistent with the actual behavior of these time series concretely the model introduces an aggregate shock into the sectoral demand shift model of the type analyzed by lucas and prescott if aggregate shocks operate multiplicatively and are autocorrelated the payoff to unemployed search can be procyclical to an extent large enough to offset the productive losses associated with search that also are procyclical

characteristics and hedonic pricing of differentiated beef demands we estimate a cbs system model of u s derived demand for meat we use this model 1 to examine relationships between three quality categories of beef and three other meats and 2 to simulate how taste shifts have affected demands for meats over time we extend previous studies by disaggregating wholesale beef production into three quality categories 1 usda choice grade or higher 2 usda select or lower and 3 cow and bull beef innovative features of our empirical model include a breakout of table cuts into choice and select and the use of a hedonic characterization of the two breakouts to value choice ness and beef ness our model demonstrates important shifts in separate demands for choice and select beef we show that separately the demand for choice grade beef declined in the 1980s and 1990s and the demand for select beef increased a departure from the relatively stable demand characterizations of more aggregated measures of combined choice and select beef jel classification q11 q13

the welfare impacts of u s trade restnctions against the canadian softwood lumber industry a spatial equilibrium in this paper we estimate the production and welfare impacts of various u s trade restrictions on canadian lumber after building a model that incorporates the regional character of the north american lumber market we simulate a variety of tariffs and quotas now advocated by a number of u s lawmakers we find that the tariff losses incurred by canadian producers could be substantial depending on the elasticity of their export supply voluntary restraint agreements however might lead to canadian gains as high as 40 per cent of their pre existing profits

federal timber restrictions and interregional arbitrage in u s lumber harvesting restrictions to protect the habitat of the northern spotted owl on federal forests in the pacific northwest pnw substan tially reduced timber available for processing by the forest products industry we consider the ex tent to which these restrictions may have altered the degree of integration of the pnw and u s south in a national market for lumber descrip tive statistics and econometric analysis of monthly price data suggest that a structural break occurred in the relationship between the two re gions product prices around the time of the har vest restrictions leading to a more integrated market after the restrictions were imposed jel q23

timber restrictions financial crisis and price transmission in north american softwood lumber markets competition among the south the west and canada as major softwood lumber production regions has been affected by timber resource endowments public land policies and the general economy to assess spatial price linkages a threshold vector error correction model is applied on softwood lumber prices from 1978 to 2011 price transmission is found to be nonlinear and asymmetric the south is more adaptive to price disequilibrium short term price adjustments are more sophisticated over the period of 1991 to 1993 related to the federal timber restrictions than over the period of 2008 to 2009 related to the global financial crisis

an operational measure of liquidity embedding the process of selling an asset in a search environment enables one to provide an exact definition of liquidity an asset s liquidity is the expected time until it is sold while pursuing an optimal in the sense of maximization of expected discounted net proceeds policy this analysis reveals that this definition is compatible with most other notions of liquidity and in particular with those of john maynard keynes impatience the discount associatedwith a quick sale predictability and flexibility copyright 1986 by american economic association

automobiles and implicit markets an estimate of a structural demand model for automobile characteristics economists have always found it difficult to investigate the demand for the automobile good due to its heterogeneity in this paper the automobile is treated as a differentiated product and a two step approach is used to estimate a system of structural demand equations for automobile attributes the obtained results are statistically sound and in conformity with theoretical expectations this should be taken as an indication of the validity and robustness of the procedure used in this analysis

spatial market integration in the presence of threshold effects a large body of research has evaluated price linkages in spatially separate markets much recent research has applied models appropriate for nonstationary data such analyses have been criticized for their ignorance of transactions costs which may inhibit price adjustments and thus affect tests of integration this analysis utilizes threshold autoregression and cointegration models to account for a neutral band representing transactions costs we evaluate daily price linkages among four corn and four soybean markets in north carolina nonlinear impulse response functions are used to investigate dynamic patterns of adjustments to shocks our results confirm the presence of thresholds and indicate strong support for market integration though adjustments following shocks may take many days to be complete in every case the threshold models suggest much faster adjustments in response to deviations from equilibrium than is the case when threshold behavior is ignored a large amount of empirical research has evaluated the extent to which spatially separate markets are integrated though the term is used loosely in the literature tests of market integration usually consider the extent to which shocks are transmitted among spatially separate markets the integration of markets can have important implications for price discovery and the operation of the market since persistent deviations from integration may imply riskless profit opportunities for spatial traders