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14
The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation
, 2010
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The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets
- FORTHCOMING IN JOURNAL OF ECONOMIC LITERATURE
, 2012
"... Households “sort” across neighborhoods according to their wealth and their preferences for public goods, social characteristics, and commuting opportunities. The aggrega-tion of these individual choices in markets and in other institutions influences the supply of amenities and local public goods. ..."
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Cited by 11 (7 self)
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Households “sort” across neighborhoods according to their wealth and their preferences for public goods, social characteristics, and commuting opportunities. The aggrega-tion of these individual choices in markets and in other institutions influences the supply of amenities and local public goods. Pollution, congestion, and the quality of public education are examples. Over the past decade, advances in economic models of this sorting process have led to a new framework that promises to alter the ways we conceptualize the policy evaluation process in the future. These “equilibrium sorting ” models use the properties of market equilibria, together with information on household behavior, to infer structural parameters that characterize preference heterogeneity. The results can be used to develop theoretically consistent predictions for the welfare implications of future policy changes. Analysis is not confined to marginal effects or a partial equilibrium setting. Nor is it limited to prices and quantities. Sorting models can integrate descriptions of how non-market goods are generated, estimate how they affect decision making and, in turn, predict how they will be affected by future policies targeting prices or quantities. Conversely, sorting models can predict how equilibrium prices and quantities will be affected by policies that target product quality, information, or amenities generated by the
The Spatial Extent of Water Quality Benefits in Urban Housing Markets
- Land Economics
, 2011
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Are Travelers Willing to Pay a Premium to Stay at a “Green ” Hotel?
, 2009
"... College is also gratefully acknowledged. ii ..."
Necessary conditions for valid benefit transfers
- American Journal of Agricultural Economics
"... Benefit transfer is an approach to estimating costs and benefits of policies in the absence of original data collection. Many different methods have been proposed (Navrud and Ready 2007). They all use estimates from one or more previous studies to predict the benefits from a new policy at a differen ..."
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Cited by 3 (0 self)
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Benefit transfer is an approach to estimating costs and benefits of policies in the absence of original data collection. Many different methods have been proposed (Navrud and Ready 2007). They all use estimates from one or more previous studies to predict the benefits from a new policy at a different point in space, time, or both. Under what conditions will these predictions be valid? Previous work on benefit transfer methodology has addressed this question by suggesting informal guidelines for the selection of previous studies (Water Resources Research 28(3), 1992 and Ecological Economics 60(2), 2006). There is consensus that the study sites should be “similar ” to the policy site in terms of their consumer populations and in their provision of the good being valued. The need for similarity is also emphasized in Environmental Protection Agency (EPA) guidelines for benefit-cost analysis. However, there is no formal test for judging whether two sites are sufficiently “similar ” to conduct a benefit transfer.
© notice, is given to the source. Valuing Incremental Highway Capacity in a Network
, 2010
"... The first author’s research was completed while he was a Post-doctoral Fellow at ASU. Thanks are due Michael Kaminsky for excellent research assistance, to Mike Keane for suggesting a direct approach for implementing our two step estimator, and to Natalie Cardita and Jon Valentine for assistance in ..."
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The first author’s research was completed while he was a Post-doctoral Fellow at ASU. Thanks are due Michael Kaminsky for excellent research assistance, to Mike Keane for suggesting a direct approach for implementing our two step estimator, and to Natalie Cardita and Jon Valentine for assistance in preparing this manuscript. Partial support for the research was provided by ASU’s Decision Center for a Desert City. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
1 Revision 9/28/10 General Equilibrium Benefit Analyses for Social Programs
"... The purpose of this paper is to describe the conceptual framework for incorporating general equilibrium effects into benefit-cost analyses of social programs. To make our description tangible we selected a specific example, the evaluation of reductions in the resources available for public primary e ..."
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The purpose of this paper is to describe the conceptual framework for incorporating general equilibrium effects into benefit-cost analyses of social programs. To make our description tangible we selected a specific example, the evaluation of reductions in the resources available for public primary education. We use a policy
differentiated housing. Preliminary version
, 2012
"... Hedonic model of segmentation with horizontal differentiated housing ..."
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unknown title
"... Revisiting the hedonic price method to assess the implicit price of environmental quality with market segmentation ..."
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Revisiting the hedonic price method to assess the implicit price of environmental quality with market segmentation
1 Partial Identification of Amenity Demand Functions
, 2015
"... This paper presents a new hedonic framework for reduced form estimation of the demand for spatially delineated nonmarket amenities. We begin from a conventional model of market equilibrium where an amenity is conveyed to homeowners by virtue of their resi-dential location choices. Different housing ..."
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This paper presents a new hedonic framework for reduced form estimation of the demand for spatially delineated nonmarket amenities. We begin from a conventional model of market equilibrium where an amenity is conveyed to homeowners by virtue of their resi-dential location choices. Different housing markets may have different hedonic price func-tions due to variation across markets in the joint distribution of preferences, income, regu-lations, and technology. In this setting, taste-based sorting within and across markets con-founds point identification of reduced form descriptions for amenity demand curves. How-ever, we demonstrate that basic knowledge of the sorting process is sufficient to construct instruments that identify bounds on demand curves. Bounds on demand curves can be translated into ranges of welfare measures for non-marginal changes in amenities. We find these ranges to be potentially informative in a demonstrative application to evaluating the benefits of improved lake water clarity in the Northeast.
