Statistical analysis is used to evaluate trends in the relative prices of natural resource commodity aggregates and to predict the adequacy of natural resource supplies. The model incorporates the Brown-Durbin custom test and Quandt's log-liklihood ratio. The results indicate that a relative price series is not stable enough to predict a consistent pattern of change and it would be unwise to base materials and extraction policies on this framework. This conclusion is reached, in part, because of the significant changes in the US economy and institutions in recent years. 22 references.

This paper presents the results of an evaluation of the role of real cash balances as a factor input for 11 two-digit SIC code industries over the period 1952-73. Using a four-factor translog cost function for each industry along with duality theory, it was possible to estimate the partial elasticities of substitution and the elasticities of demand for all factors. The substitution elasticities between real cash balances and production labor as well as with capital were found to be significantly different from zero. The interest elasticity of demand for each varies with industry and ranges from -.22 to -.41. The overall findings suggest that the neoclassical model offers considerable promise for modeling the firm's demand for money.

This study evaluates the effectiveness of a radon risk communication program based on how the estimated value of additional information varies across the six types of descriptive materials randomly assigned to a panel of homeowners participating in a radon utility model estimated with probit from respondents' answers to a contingent behavior question asking if they would purchase at a one-time price the services of a licensed technician to analyze their radon problems. The findings indicate that the information materials used most frequently by states and testing companies to explain radon's risk are the least effective of the six considered.

This paper develops and estimates a demand model to describe a household's demand for distance from a landfill with hazardous wastes. This model provides one basis for gauging the intensity of a household's desire to avoid living near this type of facility. Using the conceptual framework of a hedonic property value model to provide the basis for demand for distance questions, a survey in suburban Boston elicited this information from 609 households. The demand estimates imply that the average household would realize a consumer surplus between $330 to $495 annually for each mile between its residence and a landfill containing hazardous waste.

This paper reports the results of a statistical summary of estimates of the marginal willingness to pay (MWTP) for reducing particulate matter from hedonic property value models developed between 1967 and 1988. Results using both ordinary least squares and minimum absolute deviation estimators suggest that market conditions and the procedures used to implement the hedonic models were important to the resulting MWTP estimates. The interquartile range for these estimated marginal values (measured as a change in asset prices) lies between zero and $98.52 (in 1982-84 dollars) for a one-unit reduction in total suspended particulates (in micrograms per cubic meter). The mean MWTP is nearly five times the median ($109.90 vs. $22.40), suggesting that outliers are important influences to any summary statistics for these estimates.

There appears to be growing interest in the development and estimation of simultaneous equation models for finance. Simkowitz and Jones [11] stimulated much of this concern in their observations on the need for these structures. Moreover, Simkowitz's application to the modeling of security returns with Logue [12] provides some support for these suggestions. Recently Lloyd [6] has argued that there may be significant problems in using two-stage least squares (hereafter 2SLS) with such models as a result of the potential for contemporaneous correlation in the structural errors across equations. The purpose of this note is to question several of Lloyd's conclusions and to provide some evidence that his findings may not be representative for the broad array of simultaneous models applicable to financial problems.

Recently, Cohen and Gujarati [2] have suggested that when multicollinearity is present there is “ …danger involved in mechanically dropping variables from multiple regression equations by t tests because t values of the regression coefficients may not be significantly different from zero when the true (population) values of these coefficients are in fact not zero…” The problem they discuss is not a new one and has been extensively treated in the existing literature. However, their approach is straightforward and will certainly aid the practitioner in his understanding of the problems associated with multicollinearity.

This paper uses computable general equilibrium models to demonstrate that partial-equilibrium welfare measures can offer reasonable approximations of the true welfare changes for large exogenous changes. With consistency in the size and direction of the indirect price effects associated with large shocks, single-sector partial-equilibrium measures will exhibit small errors. Otherwise the errors can be substantial and difficult to sign.