Implicit Price Research Articles

Cost analysis of implementation of a population level rabies control programme for children in India

BackgroundRabies is an endemic and major public health problem in India. This paper reports cost of implementation of various Pre-Exposure Prophylaxis (PrEP) and Post-Exposure Prophylaxis (PEP) strategies at programmatic level to avert rabies deaths in children in India. MethodsThe cost of implementation of various PrEP + PEP and PEP only regimens recommended by WHO and national guidelines was calculated separately for the first year of implementation for children in the age group of 0–5 years (U-5) and 5–15 years (U-15). The cost was calculated at the level of health facility from government's perspective considering the implementation of the strategies under National Rabies Control Program. All costs were converted into 2020 Indian National Rupee and International Dollars' value using implicit price deflators for Purchasing Power Parities. Base case, scenario and one-way sensitivity analyses were conducted. ResultsThe cost of implementation of PrEP regimen is several times higher than all other PEP regimens in children in the age groups of 0–5 years and 5–15 years for the first year of implementation. However, the study also reported use of intradermal route of vaccination and local infiltration of ERIG in wounds only as a cost-saving approach to prevent rabies deaths in children in situations where PEP only strategies are implemented. ConclusionsThere is a need to conduct primary studies in order to obtain data for cost of implementation of shorter regimens in real-time settings.

A new empirical approach for mitigating exploding implicit prices in mixed multinomial logit models

AbstractThis paper introduces a new shifted negative log‐normal distribution for the price parameter in mixed multinomial logit models. The new distribution, labeled as the μ‐shifted negative log‐normal distribution, has desirable properties for welfare analysis and in particular a point mass that is further away from zero than the negative log‐normal distribution. This contributes to mitigating the “exploding” implicit prices issue commonly found when the price parameter is specified as negative log‐normal and the model is in preference space. The new distribution is tested on five stated preference datasets. Comparisons are made with standard alternative approaches such as the willingness‐to‐pay (WTP) space approach. It is found that the μ‐shifted distribution yields substantially lower mean marginal WTP estimates compared to the negative log‐normal specification and similar to the values derived from models estimated in WTP‐space with flexible distributions, while at the same time fitting the data as well as the negative log‐normal specification.

Urban Crime and Its Net Implicit Price to North Carolina Households

This study investigates the impact of urban crime rates—property and violent—on wages and rents and estimates the net implicit monetary value of crime rates for living in metropolitan areas, using the American Community Survey 2019 data for cities in North Carolina. A seemingly unrelated regression estimation finds that the crime rates are capitalized into both wages and rents, and suggests crime rates affect wages positively and rents negatively. This investigation estimates a negative value of $51.80 per month—the average net marginal implicit price—for living in cities with high city crime rates. This negative value suggests that households are being compensated for living in cities with high crime rates.

Does Quality Matter for Fruit Purchase Decisions? A Hedonic Analysis

The purpose of this study is to identify the implicit price of the fruit quality attributes in Bangladesh. In total, 700 consumers were interviewed from twelve districts of Bangladesh during the period of July–October 2020 with the help of a semi-structured questionnaire. The semi-log functional form of the regression model was estimated to find out the important quality attributes for a consumer purchase decision. The study revealed that both intrinsic and extrinsic attributes are important for imported and local fruit purchase decisions; however, “whole fresh” is the most important factor for fruit purchase decisions as consumers pay 19% less if the hog plum is whole rather than its other forms, i.e., sliced, pickled, etc. The purchase decisions of imported fruit over locally produced fruit differ by size and traceability information. The policy for the retail business of fruit is that the fruit may be traded as value-added products, such as slices, pickles, juice, and desserts, etc.

Examining Implicit Price Variation for Lake Water Quality

Hedonic price models are commonly used to estimate implicit prices for lake water quality across small geographic regions that might be assumed to be a part of a common real estate market. Yet recent studies expand the geographic scale of the hedonic model potentially obscuring important differences in implicit prices across markets. We estimate implicit prices for lake water quality across multiple states in the northeast and upper Midwest in the United States of America at three different geographic scales: substate, state, and multistate. We find implicit price estimates are heterogeneous at both the substate and state-levels, which is not accounted for in state-level or multistate hedonic models. Our results show that estimates across a broad geographic scale can be driven by a single subregion within the defined area. Overall, the study demonstrates that using a single hedonic model over a large geographic area may obscure important heterogeneity in implicit prices used to estimate potential benefits for water-quality improvements.

Assessing the value of 3G and 4G network modes in mobile phone pricing

PurposeMobile phone network third-generation (3G) and fourth-generation (4G) modes are the most commonly used modes in many developing countries. This study aims to assess the impact of these network modes and other mobile phone attributes on their retail prices in Pakistan, the fifth most populous and developing country.Design/methodology/approachThis study has been conducted in Punjab province, which shares about 53% of the Pakistan’s population. Hedonic price analysis was carried out on all new mobile phone attributes sold in Punjab’s markets at the retail level. Various econometric tests, that is, Ramsey regression equation specification error, Breusch–Pagan/Cook–Weisberg and variance inflation factor, were calculated to check the robustness of the results.FindingsResults of this study indicated that the mobile phone prices were significantly higher for the sets having 4G network mode than the 3G mode. In addition to this, other mobile phone attributes that significantly influenced their prices were brand, weight, camera, random access memory (RAM), memory size, operating system, battery capacity and display size.Research limitations/implicationsThis study has implications for mobile phone sales and marketing strategies of the manufacturers, importers, retailers and others involved in the mobile phone business in developing countries like Pakistan. Mobile phone manufacturers/importers can increase their profits by producing/importing the 4G enabled devices.Originality/valueAlthough many studies in the literature estimated the implicit price of mobile phone attributes, none of these had explicitly assessed the impact of network mode generation of mobile phones on their prices.

Investigating the price effects of honey quality attributes in a European country: Evidence from a hedonic price approach

AbstractThis study investigates the price effects of honey quality attributes in Spain. Price and product characteristics are collected from 264 honey labels found on the shelves of the main representative retail stores available in the national territory. The marginal effects and the implicit prices of honey characteristics are assessed through a hedonic price approach. Results show that the prices of honey are affected by leader brands sold in gourmet stores and hypermarkets in glass packages compared to producer brands sold in discounts stores and supermarkets in plastic packages. The organic production and the protected designation of origin quality labels generate positive marginal effects on the prices of honey, as well. Regarding the origin of honey, the highest relative and absolute consumer price premiums are received for honey coming from the European Union and Spain compared with blend honey coming from EU and non‐EU countries. Consumer implicit prices are also influenced by mono‐floral and gourmet honey with additional properties (e.g., ginseng) compared with the multifloral varieties. These findings are a useful source for a better understanding of the evolution of honey in the Spanish market. Spanish beekeepers who can differentiate their honey, may use these results as an orientation for their business strategies.

MONETARY POLICY AND AGRICULTURAL SECTOR PERFORMANCE IN NIGERIA: A GRANGER CAUSALITY APPROACH

Purpose: The agricultural sector provides a formidable basis for the Nigeria’s economic diversification. To achieve this in the short-run, to start with, the use of appropriate monetary policy instruments is indispensable. Hence, this study examined the short-run causality between monetary policy and agricultural sector performance. Methodology: Time series data for the study were obtained from the Central Bank of Nigeria between 1981 and 2020. The monetary policy instruments in the model were money supply (MS), monetary rediscount rate (MR), exchange rate (ER), prime lending rate (PR) and agricultural sector implicit price deflator (ASI) while agricultural sector performance was proxied by the gross domestic product for the sector. After first differencing, the Augmented Dickey-Fuller test confirmed the stationarity of the variables. Optimal lag selection-order recommended four lags. The vector autoregressive model, pairwise Granger causality test and Wald coefficient test were used to show the robustness and validation of the causality test. Findings: The result shows that the t-statistics of LnMS (2.70), LnMR (3.00), LnER (2.05) and LnPR (3.53) were statistically significant (p<0.05), suggesting bidirectional relationship between monetary policy and agricultural sector performance. There was a unidirectional causality running from LnASI to LnASG. It was concluded that monetary policy Granger-caused agricultural sector performance in the short-run. Unique contribution to theory, policy and practice: The study recommended that monetary authorities should note that that changes to MS, MR, ER, PR and ASI would affect ASG and vice versa in the short-run as well as the overall macroeconomic growth; and policy decisions that are aimed at altering ASG would affect MS, MR, ER, PR.

Shopping in Reality or Virtuality? A Validation Study of Consumers' Price Memory in a Virtual vs. Physical Supermarket.

This study validates a VR supermarket as a research tool by studying the influence of the food shopping setting on consumers’ price memory—an important antecedent for price comparisons in the purchase situation. In a quasi-experiment, two groups of consumers were given a shopping task in either a physical supermarket or a virtual reality supermarket setting. Upon task completion, participants’ explicit and implicit price memory was measured across three food product categories (pizza sauce, pasta, and dark chocolate). Results revealed no significant difference between the two settings, supporting the comparability between the VR shopping experience and the experience in the physical supermarket. The VR supermarket can therefore be a valid tool for studying consumer food choice behaviour in a shopping context. Further results show that explicit price memory is weaker compared to implicit price memory, that even prices are remembered better than odd prices, and that price memory follows the expected pattern in a VR supermarket as well. Finally, exploratory findings indicate that the feeling of physical presence and self-presence is relatively high for this particular VR supermarket, whereas social presence is weaker.

Methods to examine omitted variable bias in hedonic price studies

Many studies use the hedonic pricing method to uncover consumers’ willingness to pay for accommodation characteristics in the hospitality industry. In most empirical applications using cross-sectional data, implicit prices might be biased if omitted time-invariant variables correlate with observed attributes. This paper proposes a set of diagnostic checks to inspect the potential bias in the estimates through exploiting repeated information for the same accommodations. Due to the limitations imposed by standard fixed and random effects panel regressions, we advocate for the use of Mundlak and Hausman–Taylor estimators. The proposed methods are applied to a study of Airbnb hedonic prices in Ibiza using a 14-month time window. In doing so, we document a novel finding: Superhosts set lower prices conditional on time-invariant quality.

Implicit prices of attributes of fine German Riesling: magnitude and heterogeneity

PurposeThis study aims to analyse how wine attributes affect prices of fine German Riesling wines, provide estimates of the magnitude and heterogeneity of the attributes' implicit prices and draw conclusions on the pricing of fine wine and the research methodology.Design/methodology/approachImplicit prices of attributes of fine German Rieslings are estimated with fixed-effects regressions and their heterogeneity across quantiles of the conditional price distribution is tested with quantile-regression techniques. The analysis is based on a unique online data set for prices and characteristics of collectible wines.FindingsQuality levels according to the German Prädikat system, additional quality awards for exceptional quality, the wine region, age or vintage as well as ullage and the bottle condition are relevant when explaining the price of cellarable wine. Additionally, the influence of the firm's individual reputation is very strong. Relative price premiums for some major attributes of fine German Riesling change significantly across quantiles of the conditional price distribution. Other attributes are characterised by a rather stable relative (but not absolute) price premium.Originality/valueThis is, to the best of our knowledge, the first hedonic price analysis which concentrates exclusively on fine German Riesling wine. By applying both classical and quantile regressions, the authors are able to derive new insights on quality-price linkages in this growing segment of collectible wine and on the research methodology.

(Un-)affordability of Homes From a Resident’s Point of View in Two Mid-Sized Canadian Cities 30 Years Apart

A new theoretical criterion of housing affordability is defined as a mismatch between where a resident likes to live if preferences are unconstrained, and where they can afford to live if preferences are budget constrained. This study theorizes and quantifies the compensatory amounts of money to be spent to reduce these mismatches by acquiring unconstrained most preferred attributes’ levels of homes. Compensatory amounts are quantified with the predicted implicit prices of almost 3,000 sold single-detached(-like) homes in each of two mid-sized Canadian cities. The analysis predicts approximately one-half of up to 74 respondents in each city in 1987 and 2020 will experience a residential mismatch if they choose their budget-constrained most preferred home. Unaffordable compensatory expenditures are especially predicted for non-managerial or professional workers if they want to afford their unconstrained most preferred attributes’ levels of house type and size, house age and exterior finish, basement condition and home renovations, and lot size and garage. Moreover, average predicted compensatory expenditures exceed loans or grants in four past and current public policies in Canada for subsidizing prices of these four attributes or increasing the wealth of homebuyers.

How Much Are Amenities Worth? An Empirical Study on Urban Land and Housing Price Differentials across Chinese Cities

As China is transitioning from a planned economy to a market-based economy, over the past 30 years, China’s economy has experienced the same type of changes that led to amenity-driven housing and land markets in more developed countries. This paper examines the effect of different types of amenities on urban land and housing prices across Chinese cities in 2020. When firms and households value some amenities, the assumption is that the preference for these amenities will be valued and reflected in both land and housing markets. We conduct a cross-sectional analysis of urban land and housing prices in prefecture and higher-level cities in China. We extend the Roback model to explore the extent to which the different land rents and housing prices reflect the compensations for interregional amenity differences across Chinese cities. We include two types of amenities: natural amenities and locally produced amenities. We perform two-stage least squares (2SLS) estimations and compute the implicit prices of various amenities for households and firms. The empirical results show that a range of amenities is valued by both households and firms, resulting in higher housing and industrial prices.

About subsidizing socially significant exchange commodities

The article is devoted to the issues of subsidizing, which are very relevant in the light of recent discussions on improving the mechanisms of direct and implicit price subsidies. The paper discusses the issues of subsidizing of socially important goods, which include, for example, oil refinery products, liquefied gas and others, provides formulas for the amount of subsidies, determining the cost of subsidizing, the trader's margin from the exchange price. These calculations will contribute to the correct planning of regional budgets for subsidies.

IMPLICIT PRICES OF JOB RISK, CLIMATE, AND AIR POLLUTION: EVIDENCE FROM TAIWAN

We examine the implicit price of job mortality rates, climate, and air pollution in Taiwan under the hedonic wage frame with panel data from 1999 to 2014. We adopt a fixed-effects model to control for the omitted year-specific factors and time-invariant individual, industry, and city factors that may affect the wage. The within-individual variations in climate and air pollution from workers who have changed their job locations make it possible to identify the impacts of climate and air pollution on wages. We find that workers in Taiwan are willing to pay 308 USD (in 2014 value terms) for the January temperature to increase by 1∘C,781 USD for the July temperature to decline by 1∘C, indicating a net loss from global warming. Besides, the implicit price of air quality is 45 USD for PM 10 concentrations to fall by 1 unit ([Formula: see text]), and the implicit price of job risks is 140 USD per unit (1/100,000).

Sustainability transitions of contaminated sites: A global meta‐analysis on economic effects of remediation behaviour

AbstractThe worldwide diversity of contaminated sites, coupled with a scarcity of available land presents a challenge for urban spatial planning and, has led to an increasing political significance for brownfield conservation and reuse to achieve land resource sustainability. In this study, economic or the so‐called ‘rebound effects’ of land regeneration are studied via a global meta‐analysis on value fluctuation of surrounding property. To this end, a total of 91 observations from 28 HPM (hedonic pricing model) studies were synthesized to conduct a meta‐analysis following a conditional random effects procedure. The empirical results indicate that, in line with expectations, the conservation and recycling of land resource indeed generate significant rebound in the implicit price of residential houses, especially for those located within 2 km of contaminated sites. Before land remediation and reuse, dwellings closest in distance to contaminated sites experience the greatest value loss. On average, the depreciation in property values within the first 1 km distance from a contaminated site is about 8.18%, significantly at the 1% level, while the corresponding adverse impact from 1 to 2 km distance is a 4.8% price premium significantly at the 5% level. The significance of the stigma or rebound effects depends on 12 attributes, in which, house age, location, floor area ratio (FAR), and central business district (CBD) variables have the largest impact of −37.38% to 37.5%. From a practical perspective, the findings of this meta‐analysis: (1) help refine contributing parameters in HPM studies to evaluate environmental economics; and (2) provide meaningful decision‐making support for cost‐effective remediation and benefit maximization.

COVID-19 effects on property markets: The pandemic decreases the implicit price of metro accessibility

The metro (or underground railways) has become a backbone in the transit systems of many cities. It has numerous externalities, such as ameliorating traffic congestion and enhancing nearby property prices. Previous studies extensively focused on the relationship between metro accessibility and property prices and obtained various interesting findings and enriched practical implications. However, this relationship in the era of the coronavirus disease 2019 (COVID-19) and other epidemic shocks has not been investigated. Based on a unique property transaction dataset (including tens of thousands of transactions stretching from 2018 to 2020) in Chengdu, China, this study develops a battery of hedonic pricing models and difference-in-differences models to decipher the time-varying relationship between metro accessibility and residential property prices. The results show that the implicit price of metro accessibility modestly decreases in COVID-19, which can be explained by the declining role of the metro. In other words, the price gap between proximate and distant properties is narrowed, and the property price gradient is flattened. Specifically, the price elasticity of distance to the metro is − 0.024 before COVID-19, but it turns to − 0.018 during the pandemic. The relative price of properties within 500 m from metro stations to those farther away (500 m − 3 km) decreases by 15.4% during the pandemic. Additionally, COVID-19 does not jeopardize property prices in Chengdu. Furthermore, the decrease in metro access premiums may be short-lived and only persisted for several months or years. The plausibility and robustness of the core findings have been confirmed through alternative treatment groups, alternative model specifications, and placebo tests.

Consumer willingness to pay for quality attributes of pangasius (pangasianodoan hypophthalmus) in Bangladesh: A hedonic price analysis

Pangasius farming in Bangladesh has grown quickly to its current levels of mass production. While the large supplies provide protein for poor consumers, the rapid development of the industry has led to low quality. The aim of this study is to analyze whether domestic consumers are willing to pay more for higher quality pangasius. To measure the implicit price of the quality attributes establishing the willingness to pay for each of the quality attribute of pangasius, we used a semi-structured questionnaire to interview a total of 292 consumers while they were purchasing pangasius from different retail markets across 10 districts in Bangladesh. The study used hedonic price model considering a semi-log functional form of regression. The results showed that odor is the most influential attribute as consumers are found to pay 7% less if the pangasius smells bad. Moreover, the quality attributes such as fish size, form, color, appearance, and abdomen are important for pangasius purchase decision. The consideration of quality attributes are varied by the demographics of consumers. The implication of the results is that Bangladeshi consumers are willing to pay more for higher quality pangasius, which is important knowledge for the growing pangasius industry in Bangladesh.

A Hedonic Analysis of Processed Tomato Prices Using Italian Regional Markets Data.

The Italian market of processed tomatoes (whole peeled and unpeeled tomatoes, chopped tomato pulp, tomato purée, and concentrated tomato paste) rose, thanks to the Italian tradition of using such products in many recipes of cuisine, until early 2000; since then, it has declined to date. Moreover, such products are traditionally considered low-price products, and their market is characterized by intense price competition. Thus, recently, producers have started to differentiate their products as a way to achieve higher margins, and escape from competition in price. By using the sales data of Italian processed tomatoes sold in several retail stores and a hedonic price model, we estimated the implicit prices associated with several attributes that are currently available in processed tomato products on the market. We find that a protected designation of origin, organic certification, and flavoring, as well as the indication of tomato variety, are the most valuable features of processed tomato products sold in the Italian market. This implies that product differentiation strategies that could be suggested to producers as the most effective are those aimed at enhancing the territorial link of the product, the environmental sustainability of the production process, and organoleptic product features, as well as its convenience.

Hedonic Price Functions and Market Structure: An Analysis of Supply-Motivated Submarkets for Salmon in California

Hedonic price functions are frequently used to identify the marginal implicit prices for characteristics of differentiated products, including seafood products. These marginal implicit prices are determined by both consumer preferences and producer costs. When preferences or costs for a single characteristic differ systematically across omitted submarkets, the results are an average of the heterogeneous effects. An empirical test for the joint significance of interaction terms is sufficient to identify the presence of submarkets. We motivate the selection of submarkets on the basis of production differences across salmon species, then use county-level aggregate retailer scanner data for the US state of California from 2013 to 2016 to estimate hedonic price functions. The results indicate that species and production method submarkets exist. Letting differences in production motivate the dimensions for submarkets results in a more accurate picture of the market.