Nonparametric Estimation of Dynamic Hedonic Price Models and the Construction of Residential Housing Price Indices

Parametric specifications for hedonic price equations are estimated using a data set from Alameda and San Francisco Counties and are compared to estimates using a nonparametric technique called locally weighted regression, LWR. LWR permits flexible estimation of the hedonic's curvature at median attributes and is less sensitive than standard regression techniques to the influence of unusual observations. The technique also avoids imposing a single functional form across time and municipalities. The LWR estimates of municipality-specific hedonics are then used to obtain implicit prices for housing attributes and to derive municipality-specific price indices. The results of extensive diagnostic checks of our technique are also reported.     

EXAMINING MERGER SYNERGY WITH THE CAPITAL ASSET PRICING MODEL

This paper analyzes the impact of mergers on the alphas and betas of actual merged firms compared to those of the homemade mergers an investor could have created by buying proportional shares of the two firms. The results provide some evidence of merger synergy. Where alpha and beta shifts were observed, the evidence did not indicate that either the relative size of target firms or concurrent capital structure changes were related to these shifts as current theory suggests. There is weak evidence that nonconglomerate mergers were more frequently synergistic.     

THE CURRENT ACCOUNT,MONETARY POLICY,MARKET SENTIMENT AND THE REAL EXCHANGE RATE: SOME IMPLICATIONS FOR THE FARM SECTOR

The real effective value of the Australian dollar declined sharply between early 1985 and September 1986. 'Market fundamentals' associated with the deterioration in Australia's terms of trade and current account, and rising foreign debt levels are the commonly cited explanation for the decline. However, several other shorter term influences may have also contributed. Theoretical and empirical analysis indicates that market fundamentals might explain, at most, 20 percentage points of the 37 per cent decline in the rate over this period. Thus, a significant real appreciation would be expected over the medium term prior to, and quite independently of, any recovery in Australia's terms of trade in general or in world farm commodity prices in particular.     

Research notes and communications: The effect of product recall announcements on shareholder wealth

Previous research Has found that product recall announcements in the automobile industry are associated with negative abnormal returns. We extend this research by examining announcements of product recalls and products taken off the market outside the automobile industry. We find negative abnormal returns for these announcements and that the returns are significantly more negative when products are replaced (or the purchase price is returned) than when the products are checked and repaired. We find only limited evidence that government-ordered recalls produce more negative returns than voluntary recalls.     

On the development of new communities

Linear programming is used to explore the relationship between a planned community and a planned development. Also, its usefulness to the developer in formulating land-use plans is evaluated.     

Effluent fees and market structure

This paper explores the efficiency properties of a system of effluent fees in a mixed economy in which polluting agents take a variety of organizational forms: private monopoly, the managerial firm, regulated firms, and public bureaus. The analysis, including some crude empirical estimates, suggests that the welfare gains from pollution control are likely to dwarf in magnitude the potential losses from the various imperfections in the economy. The tentative conclusion is that the case for a system of fees that is invariant with respect to organizational form is not seriously compromised by likely deviations from competitive behavior.     

Direct Household Assistance and Block Grants

This paper has three purposes. Most of the paper summarizes the background, rationale, and proposals on housing assistance developed by the President's Commission on Housing–a Housing Payment Program to help low-income citizens pay housing costs in the existing housing market and a Housing Component for the Community Development Block Grant Program, A second purpose is to review some of the range of opinion on the Commission as it developed its proposals. Finally, I want to suggest that the credibility and potential support for the proposals are undermined currently by their being advanced in a climate of budget cutting for housing programs.