HEDONIC PRICE ANALYSIS OF THE EFFECT OF A FLOODPLAIN ON PROPERTY VALUES1

ABSTRACT: The effect of a floodplain location on the market value for property is controversial, with the conventional wisdom being that buyers are myopic. Previous parametric and nonparametric statistical tests have proven inconclusive in deciding the issue. Herein, a theoretical model, that of hedonic price indexes, is posited and tested, using housing sales characteristics data obtained from a Multi-List Service cooperative. This study suggests that home buyers do adjust the purchase price for houses within a floodplain, and this amounts to, on average, just over 12 percent. The data are from a small midwestern town in which the last severe flooding occurred a decade ago.     

Trends in real commodity prices: How real is real?

Testing for the existence of downward trends in real commodity prices has been the focus of several studies since the Prebisch–Singer hypothesis was formulated back in 1950. In this article, we focus on annual and monthly series of various commodity categories and consider alternative price deflators. Based on the methodology of Harvey et al. (2010), which is robust to the order of integration of the time series, we conclude that the time frequency and the price deflators play a key role when testing for the Prebisch–Singer hypothesis. For instance, at an annual frequency (1900–2003, 1900–2008), it becomes considerably more likely to support it when deflating by the unadjusted US CPI-all items than when deflating by the Manufactures Unit Value (MUV) Index or the Historical Price Index of Manufactures (HPIM). This finding is in agreement with the Svedberg and Tilton (2006) discussion on the CPI's overestimation of inflation and the measurement of the real price of copper. When dealing with monthly data (January 1957–December 2010), our results show that real prices tend not to reject the null hypothesis of a trendless series, except when deflating by the PPI-Crude Materials and, to a lesser extent, by the HPIM.     

Long-term trends in the Real real prices of primary commodities: Inflation bias and the Prebisch–Singer hypothesis

In his recent article on measuring the long-term trends in the real prices of primary commodities, Cuddington (2010) extends in several important respects our earlier efforts (Svedberg and Tilton, 2006) to correct real commodity price trends for biases in the Consumer Price Index and other deflators. First, he argues for a log-linear relationship between prices and time. Second, he proposes a simple and quick method for obtaining corrected price trends from the published but uncorrected estimates. Finally, he illustrates, for the case of copper and presumably for many other commodities as well, the difficulties of obtaining real price trends significantly different from zero when the log values of the price data contain a unit root, requiring the use of difference stationary models.We welcome these insights, which should improve and make easier efforts to estimate correctly real commodity price trends over the long run. We would stress, however, that it is still important to correct for the biases in inflation indices, notwithstanding the failure of difference stationary models to obtain long-run real price trends (both corrected and uncorrected) significantly different from zero.     

Evaluating a small deposit next to an economically viable gold mine in West Africa from the points of view of the mining company,the government and the local community

This paper addresses the question of evaluating how much the different stakeholders stand to gain from a mining project. By carefully analysing the breakdown of the cash-flows generated, we were able to estimate the amounts received by the local community and by the national community (outside the mining area), the taxes and royalties received by the government and the profits made by the mining company. A real options framework was used to take account of the inherent uncertainty on the commodity price and the reserves, and the operating flexibility (that is, the possibility for the company to stop mining if the commodity price drops and/or the reserves prove to be lower than that had been envisaged). A synthetic case-study of a gold mine in West Africa was used to illustrate how this procedure could be applied in practice. By using the real option framework we were able to envisage scenarios for developing an extension to a deposit as a function of future values of the commodity price. The procedure proposed should provide governments and NGOs with more objective data for making policy decisions.     

The anatomy of three commodity booms

Three major commodity booms since the second world war are identified and analyzed. In all three, demand shocks predominated as triggers to the commodity price rises. The first boom, in 1950–51, was caused by the massive inventory buildup in response to the Korean war. The second, in 1973–74, was accentuated by widespread harvest failures and by OPEC's market management, which tripled the price of oil. The third boom started in 2004 and has not yet run its course. This time, the explosive growth of China's and India's raw materials demand has played a key role. The first two booms collapsed as the world economy went into recession and excessive inventories were sold out. The third boom may prove more durable since the world economy continues to expand briskly and commodity inventories have remained small.     

Is risk-sharing resource taxation in society's best interests if prices are log-normally distributed?

This paper contributes to our understanding of the perceived benefits for society of risk-sharing resource taxation. In the particular context of log-normally distributed prices a model is developed which enables comparison of risk-sharing resource taxation with an alternative in determining the overall return to society from auctioning an extraction lease. The main finding of the paper is a potential exception to the general preference for risk-sharing resource taxation if the bidding firms are effectively risk neutral. This exception is illustrated numerically in the context of the impact of increased price uncertainty, but it is shown not to be robust with respect to divergences from risk neutrality in the risk attitudes of firms. Consequently, it is concluded that the choice of risk-sharing resource taxation is likely to be in society's best interests, regardless of the probability distribution of prices.     

Long memory and chaotic models of prices on the London Metal Exchange

Many financial time series exhibit irregular behaviour. Economic theory suggests that this irregular behaviour might be due to the existence of nonlinear dependence in the markets. Thus, economic time series are governed by nonlinear dynamics.The purpose of this paper is to investigate price behaviour in the London Metal Exchange market. Thus, this study will test the two most attractive nonlinear models—long memory and chaos—on six metal commodities to ascertain which model is consistent with the observed metal price nonlinear dynamics.Application of long memory and chaos analysis provides new approaches for assessing the behaviour of metal prices. We identified, in tin, a case of chaos. Our empirical results in the case of aluminium support the long memory hypothesis. A short memory model explains the underlying processes of the nickel and lead returns series, while zinc returns reflect an anti-persistent process. To our knowledge, this is one of the first attempts to apply long memory and chaos analysis in the evaluation of the behaviour of metal prices.     

Metal prices and the business cycle

Metal price fluctuations have recently been of interest not only because of their cyclical volatility but also of their interaction with business cycles. A related issue is whether metal prices move together sufficiently to collectively reflect macroeconomic influences. Correlation or the tendency for prices to move together has been termed “comovement”, where the commonality in prices reflects the tendency of commodity markets to respond to common business cycle and trend factors. Metal prices are known to respond to macroeconomic influences and the latter might well explain the common factor which causes them to move together. Our goal is to provide an estimate of the common factor in metal prices and to relate this factor to important macroeconomic influences. The prices we study are for aluminum, copper, tin, lead and zinc; the macroeconomic variables include industrial production, consumer prices, interest rates, stock prices, and exchange rates. Our results confirm that the common factor in metal prices can be related to such macroeconomic influences.     

Comment: Investor demand and spot commodity prices

Tilton et al. claim in their article “Investor demand and spot commodity prices” to show that “investor demand can be pushing up a commodity's price even when investor stocks are falling.” In the present comment, it is argued that in both the cases described by Tilton et al., investors are supplying the market, putting physical material into it, rather than adding to demand. Thus, the reasoning by Tilton et al. is not concerned with the phenomenon referred to in the traditional theory, where, in the absence of changes in demand and supply fundamentals, prices rise as a result of increased investor demand for futures contracts.     

Valuing the benefits of the urban forest: a spatial hedonic approach

This paper measures the benefits of the urban forest by examining its effect on housing prices. A Geographic Information System is used to develop a measure of the urban forest, the Normalised Difference Vegetation Index, from satellite imagery and to construct other variables from a variety of sources. Spatial hedonic housing price models for the Indianapolis/Marion County area are estimated. The models indicate that greener vegetation around a property has a positive, significant effect on housing price, holding everything else constant. This effect is dominated by measures at the neighborhood level. These findings indicate that property owners value the urban forest, at least in part, by the premium they pay to live in neighborhoods with greener, denser vegetation. These findings also indicate that public action to maintain and enhance the urban forest may be warranted. Planners and urban foresters can use these findings to inform public and policy debates over urban forestry programs and proposals.     

ECONOMIC INCENTIVES FOR WATER CONSERVATION ON THE MONTEREY PENINSULA: THE MARKET PROPOSAL1

ABSTRACT: Literatures on price‐based urban water conservation and on market‐based mechanisms to manage natural resources suggest that market‐based management of urban/suburban water use may be feasible. A market‐based proposal that emerged from a water shortage on California's Monterey Peninsula is presented. In the proposal, conservation incentives arise both from an ability among end‐users of water to reduce consumption and sell use‐rights to water, and from a penalty price for consumption in excess of one's use rights. The amount of water associated with use rights is capped and varies according to hydrological, meteorological, ecological, and other criteria. Requirements for further study of the proposal are listed, and the role that similar market‐based mechanisms could play in urban water management is discussed.     

Investor demand and spot commodity prices: Reply

In a recent article (Tilton et al., 2011), we argue that even when investor stocks are declining an increase in investor demand can cause a commodity's price to rise, a conclusion that is both contrary to conventional wisdom and counter-intuitive. In his comment on our article, Olle Östensson (2011) challenges this finding. After assessing his concerns in this reply, we maintain that our original finding is valid: investor demand can be driving commodity prices higher even when investor stocks are falling.     

Reply: Investor demand and spot commodity prices

In a recent article (Tilton, Humphreys, and Radetzki, 2011), Tilton et al. argue that even when investor stocks are declining an increase in investor demand can cause a commodity's price to rise. They contend that this conclusion, which is based on two hypothetical examples, is both contrary to conventional wisdom and counter-intuitive. In my comment on the article (Olle Östensson, 2011), I challenged this finding. In a reply to my article, Tilton et al. maintain that their original finding is valid: investor demand can be driving commodity prices higher even when stocks are falling. In my present reply, I contend that their argument with respect to the first example confuses the actions of a minority of investors with those of all investors and is well accommodated within the framework of traditional theory. I further argue that their second example rests on an assumption regarding investor behavior that is unproven and that in any case falls outside the framework of analysis of futures markets.     

基于指标规范值的地表水水质的模糊综合评价

传统的模糊综合评价法用于地表水水质评价,当指标数较多时需要设计很多隶属函数,设计和计算工作量皆很大,实际使用不便。在设定指标参照值和规范变换式基础上,将指标按各级标准规范值相近程度进行适当分类,只需分类设计隶属函数即可,大幅减少了计算工作量,使模糊综合评价法应用于地表水水质评价变得简化。     

惠州市陈江镇土地定级暨基准地价评估与成果分析

2002年,陈江镇划归惠州市城区管辖,行政区划的改变给该镇的土地价格带来了明显变化.介绍了陈江镇土地定级与估价过程中资料的收集、评估参数的确定、估价技术方法的选择和土地定级的估价.在对比前后工业、商业、住宅用地的价格后,重点从级别范围的变动、地价体系的变化和地价水平三个方面详细分析了陈江镇的基准地价在行政区域变化前后土地价格变化的原因,并对基准地价与原惠州城区地价体系的衔接作了具体分析.     

基于博弈模型的水价策略与节水策略分析

在当前水资源浪费、用水效率较低的背景下,仍然有许多地区继续实行低水价政策,本文认为这是供水企业与用水企业以及政府水务部门相互博弈的结果。通过构建一个供水企业与用水企业的博弈模型,并采用演化博弈分析方法分析动态演化的结果,本文发现当前采用低水价的主要原因在于：供水企业制定水价时要同时考虑私人收益与公共节水收益,而高水价对经济产生的冲击成本不足以弥补高水价产生的公共节水收益与私人收益,从而导致有些地区供水企业不敢提高水价,一直采用低水价策略。进一步地,本文采用不完全信息动态博弈方法分析供水企业与政府关于水价的议定过程,发现提高水价对经济的冲击越大,且节水技术投入成本越大而节水的公共收益越小时,政府水务部门同意低水价的概率越大;反之,则同意高水价的概率越大。从博弈论的角度系统地分析了低水价产生的决策过程,可对提高水价、促进节约用水具有一定的指导意义。     

基于双系统理论的消费者价格判断决策模型

参考价格理论是构建价格判断模型的传统理论,其价格判断模型是一种典型的推理性模型.根据双系统理论,人们的决策应是推理性和直觉性两类过程的交互作用,心理账户理论正是描述直觉性决策的基本理论之一.构建了基于参考价格与心理账户的双系统价格判断决策模型,对不同心理账户数据进行分析发现,被试者的目标价格决策过程具有显著差异.     

浅谈地价评估和管理中的几个问题

土地价格是土地价值和权益的具体表现，是调节土地利用的重要手段。地价管理在推进土地有偿使用、优化配置土地资源、促进土地市场建设等方面发挥着重要作用。而现行地价体系比较成熟的只有作为国有土地使用权出让标准的一种基准地价，为适应其它土地权利流转的需要，应建立以土地权利为核心的新型地价体系。     

地价模型在农用地基准地价评估中的应用——以宿州市埇桥区为例

以埇桥区农用地为研究对象，基于农用地分等定级成果，建立不同的地价模型并进行统计检验，得到农用地综合质量和农用地价格之间的最佳关系模型，揭示农用地的综合质量和农用地价格的统计规律。研究认为，在市场交易案例很少的情况下，建立地价模型进行基准地价的评估是科学的，在此基础上对农用地基准地价进行评估和实证分析。     

Pricing Public Parks

Admission prices are typically charged for entry to archaeological sites, museums and historic buildings, although rarely to public parks. This study explores the feasibility of introducing an entry charge to a public park in Naples, the Bosco di Capodimonte. It investigates different pricing options: a revenue-maximizing price, a discriminatory price to deal with equity, a 'sufficing' price to cover maintenance costs and a welfare economic social optimal price. The analysis documents the effect of different entry charges on visit numbers and revenue collected, and includes a cost-benefit analysis of the admission price policy. Total consumer surplus is also calculated for the different entry price scenarios.