Pooled Cross-section Time-series Data Research Articles

Stumpage Prices in Southwestern Ontario: A Hedonic Function Approach

Abstract Timber used in the production of lumber in Southwestern Ontario varies in a number of characteristics, and the lump-sum stumpage price is expected to reflect differences in those characteristics. When heterogeneous inputs are used in production, the hedonic price function approach may be used to estimate marginal implicit values of the various input characteristics. Hedonic price functions were estimated for timber in Southwestern Ontario using pooled time-series cross-section data from a large sample of timber sales. The results indicate that volume, species composition, tree size, timber quality and distance to the purchasing mill all affect lump-sum stumpage prices. Estimates of the contributions that each of these characteristics makes to stumpage prices are presented. The estimated hedonic model was tested by comparing the model's forecasts of stumpage prices with forecasts made by personnel from the Ministry of Natural Resources. For. Sci. 36(4):1119-1132.

The demand for cinema in the United Kingdom

J^emand functions for leisure activities such as sport (Cairns, Jennett & Sloane, 1986) and theatre-going (Moore, 1968, Withers, 1980, Kelejian & Lawrence, 1980) have been estimated by economists. Relatively little work has been done on the cinema (Spraos, 1962, Cameron, 1986, Cameron, 1988). Cinema attendances have fallen rapidly since the 1950's. As this accompanied a rapid growth in incomes we might suspect that the cinema is an inferior good. Higher income may have caused a switch to activities such as opera and ballet which might be superior goods (Browning & Sorrell, 1954, Halsey, 1972, Throsby and Withers, 1979). Household expenditure survey data for Australia (Throsby & Withers, 1979, p.104) and Great Britain (Cameron, 1986, p.52) shows a consistent increase in spending on cinema attendance as income rises suggesting that it is a normal good. Attempts to isolate the income elasticity of demand for cinema, using econometric methods, have failed to find anything of statistical significance whether using cross-section data (Spraos, 1962) or time series (Cameron, 1986, 1988). This paper uses pooled cross-section time-series data which provides a well defined positive income elasticity so long as a log-linear functional form is used.

The Impact of Medical Malpractice Insurance Rate Regulation

The Impact of Medical Malpractice Insurance Rate Regulation Abstract This study examines impact of rate regulation laws on direct writer market share and loss ratios for medical insurance industry. Direct writer market share is significantly higher in states which have both non-competitive rating (NCR) laws and active joint underwriting associations (JUAs) than in states which have only one or neither of these characteristics. NCR laws have had little independent effect on underwriting results in this industry. However, direct writers appear to fare better under NCR laws than they do under competitive rating (CR) laws. While direct writer market share is positively related to loss ratio in CR states, in NCR states this relationship is far weaker. Introduction The impact of rate regulation on underwriting results has been subject of a number of studies. Most of these have examined auto insurance industry. Others have focused on homeowners insurance and general liability. To date, no study has examined impact of rate regulation laws on medical insurers. Such a study is of interest, however, for at least three reasons. First, structure of medical insurance industry differs substantially from that of other lines of insurance which have been examined in context of rate regulation. Examining impact of rate regulation on such a dramatically different line of insurance provides a test of robustness of earlier findings. Second, such a study would enhance understanding of some important economic factors which have served to shape today's medical environment. Previous studies in what may be broadly referred to as the economics of medical malpractice have focused on determinants of claims frequency and severity, and impact of litigation on physician behavior. However, little attention has been paid to medical insurance industry. Third, gaining insight into determinants of underwriting results in medical insurance industry is important from a practical standpoint because this line of insurance has suffered acutely in recent years and, as a result, cost of insurance has increased while its availability has dwindled. This study investigates impact of rate regulation laws on state-level loss ratios for medical insurance industry. A telephone survey of each state insurance commissioner's office was conducted to obtain rating laws pertaining to medical insurers. The impacts of other variables of interest, such as direct writer market share, are also examined. This article first overviews literature on effects of rate regulation on underwriting results. Then medical insurance market is described and contrasted to other lines which have been examined previously for rate regulation effects. The specification of model and empirical results are presented next. The results and their implications are then discussed. Previous Multivariate Approaches The literature on impact of rate regulation laws is extensive. This section briefly reviews results of large sample studies which have employed multivariate techniques to assess impact of rate regulation laws. For a full survey of literature on impact of rate regulation laws, see Harrington [8]. Ippolito [12] used multivariate approach to control for factors that may influence loss ratios independently of rating laws. Ippolito examined impact of auto insurance rating laws on loss ratios, employing two estimation strategies. The first strategy used pooled cross-section time series data, but did not correct for either heteroskedasticity or autoregression. The model was estimated by ordinary least squares (OLS), and no effect of rate regulation on loss ratios was observed. …

Do casinos enhance crime?

This article analyzes the possible impact of the 1978 introduction of casino gambling in Atlantic City on crime in that region. Pooled time-series cross-sectional data from sixty-four localities for the years 1972 to 1984 were used to investigate four types of property crimes and total violent crimes. The results suggest spatial crime spill-over from Atlantic City, where violent crime diminished most rapidly, followed by robberies and auto thefts. Larcenies declined least rapidly. The greatest postcasino crime increase was observed for violent crimes and auto thefts and the least for burglaries. A one percent increase in the distance from Atlantic City was associated with greater reduction in all crimes than was a one percent increase in police outlays.

A Structural Model for Developing Countries' Manufactured Exports

A dynamic structural econometric model is developed to analyze movements in manufactured exports and to capture lags in the adjustment to equilibrium. The model is estimated with pooled cross-section time-series data for a representative sample of fifteen developing countries grouped according to their export market power. The results suggest that prices, domestic productive capacity, and external economic activity are critical determinants of manufactured exports from developing countries. The structural parameter estimates are used to infer the effects of changes in destination country income, distinguishing between the short-run and long-run export volume and export revenue effects. The results indicate that domestic economic policies that promote investment and capacity in export-oriented activities are likely to play a key role in increasing foreign exchange earnings in developing countries, even if growth in external demand is slow.

Substitution, technical change and returns to scale in British Columbian wood products industries

The size and quality of timber in British Columbia declined steadily through the 1960s and 1970s. This paper presents estimates of factor substitution, technical change and returns to scale for four British Columbian wood products industries – interior and coast sawmills and planing mills, shingle mills and plywood and veneer mills – using pooled cross-section time-series data, 1963–79. Estimates of capital stocks are not available for these industries, so estimates of capital services are computed from aggregate capital stock and energy consumption data. The estimated cost functions are well behaved and show that all the inputs (capital services, materials and labour) are substitutes. Thus, capital services and labour can be substituted for the increasingly scarce natural resource. The input demand functions slope down and are inelastic. Interior sawmills exhibit constant returns to scale while the other industries show increasing returns to scale. The technical change is capital services using, labour s...

ADMINISTRATIVE COSTS OF STATE LOTTERIES

A Cobb-Douglas cost function is estimated using pooled time-series cross-section data on state lottery sales and administrative costs. Strong evidence of economies of scale is found: administrative...

International Trade Constraints and Commodity Market Models: An Application to the Cotton Market

This paper presents a model that accounts explicitly for quantitative controls on international trade. Countries are classified into two groups depending upon whether or not their imports and exports are responsive to world prices, with the result that all adjustment burdens are borne by a subset of the world market participants. The model is tested with pooled time series-cross section data for the cotton market. M s ODELS of world commodity markets differentiate among market participants in a variety of ways. Single-equation approaches make strong implicit assumptions about cross-country similarities in consumer preferences and producer responsiveness, while in other approaches world markets are disaggregated on the basis of time period, income group, or type of economic system. The present paper develops a model that groups countries in terms of the presence or absence of controls on international trade. As Johnson and others have noted,1 quantitative controls on trade are prominent in the trade of many primary products. With such restrictions, domestic prices bear no necessary relationship to international prices, and movements in world prices may be of limited relevance to explaining global consumer and producer behavior. In the model in this paper, countries are classified into two groups depending upon whether their consumers and producers are responsive to international prices. The international market is then seen as one in which the burden of adjustment falls on the producers, consumers, and holders of stocks in the price-responsive countries. The estimation procedure uses a cross-section time-series data set, in which country-specific dummy variables allow for differential behavior among the various trade participants. Cotton is the focus of the paper, as the cotton market is an especially good example of a market with quantitative restrictions: cotton production is dominated by less-developed countries (LDCs) and centrally planned economies (CPEs), and exports are largely determined by the decisions of state trading monopolies. I. A Trade Constrained Model The point of departure in developing the model is to group countries a priori according to whether their consumers, producers and inventory-holders are world price-responsive (R) or non-responsive (N). If x countries are fully insulated from world prices, and z countries are responsive to world prices, the global production-utilization identity can be written as

State gasoline consumption in the USA: An econometric analysis

This paper examines the determinants of state gasoline consumption per household in the USA using pooled time-series cross-section data for the period 1966–1980. It was found that gasoline price, fuel efficiency of vehicle stock, percentage of population in metropolitan areas, and non-automobile transport modes have negative effects on consumption, while per capita income, number of vehicles, non-agricultural employment per household, age 18–44, warm weather, visits by out-of-state automobiles, and share of buses and trucks have positive effects on consumption. Holding constant the size of vehicle stock and its fuel-efficiency characteristics, the short-run price elasticity of gasoline was found to be -0.321 for the period 1966–1973 and -0.106 for the period 1974–1980. It was also found that gasoline demand experienced a temporary shift both in the intercept and in the price coefficient during the shortages of 1974 and 1979, and had undergone a permanent shift in the same parameters during the post-embargo period.

Factor Demand and Returns to Scale in Milk Production: Effects of Price, Substitution and Technology

A translog cost function was estimated using pooled time series-cross section data from five Northeastern States to study structural changes in the dairy industry. The approach given in the duality theory was found useful in estimating the input demand structure under changing input prices and technology conditions. The estimated Allen partial elasticities of substitution show the existence of substitution between energy and non-energy inputs in dairy farming. Despite input price increases the dairy industry maintained competitiveness as seen by the returns to scale parameters.

Effects of competition on medicare administrative costs

This paper examines the effects of introducing competitive contracting into the Medicare Part B program. The administrative costs of contractors (carriers) who process Medicare claims for medical services are examined to determine relative efficiencies of firms operating under either competitive or non-competitive contracts. Pooled time-series cross-sectional data are used to estimate an average total cost function. Findings are that (1) appreciable cost reductions were obtained by the introduction of competition, (2) economies of scale are present in Medicare claims processing, and (3) carriers who are non-profit organizations (i.e.,Blue Shield plans) do not exhibit higher costs than comparable commercial insurance companies.

A note on the dynamic adjustment of the demand for international reserves by LDC's

The dynamics of the adjustment of the demand for international reserves by LDC's is analyzed. Using a GLS procedure on pooled cross section-time series data it is showed that, contrary to previous results, the speed at which actual reserves adjust to desired reserves is very fast: in one year 95 percent of this adjustment is completed.

International comparisons of the residential demand for energy

A two-stage model of residential energy demand is constructed, in which consumer expenditures are allocated between energy and five other consumption categories and energy expenditures are allocated across fuels. Under the assumption of homothetic separability of the energy aggregate. expenditure share equations corresponding to indirect translog utility functions are estimated using pooled cross-section time-series data for a sample of nine industrialized countries. Energy demand is found to be much more price elastic than had previously been believed. The reasons for, and implications of, this result are discussed.

Causality and intraurban location

Most intraurban location models in urban economics are based on a a priori assumption that employment is exogenous and a determinant of residential location. In this paper this assumption is relaxed or tested by estimating a dynamic model using pooled cross-sectional time-series data; the results suggest that causality runs from residence to employment, not vice versa.