The choice of functional forms for hedonic price equations: comment

Article Abstract:

Although the Box-Cox methodology is the preferred functional form for hedonic price functions, its use does raise a number of problems. For example, the large number of coefficients produced using Box-Cox can lower the accuracy of any given coefficient, which might result in less exact specific price estimates. In addition, the Box-Cox function may be inappropriate for prediction and contains a structural impediment to dealing with data sets containing negative numbers. The Box-Cox methods for predicting economic futures insofar as pricing is concerned may be unnecessarily complicated by the cumbersome analyses of slopes and elasticities they employ. Empirical examples of the Box-Cox methods include brief examinations of hedonic price equations for geographic areas within greater Seattle and greater Los Angeles.

Economic research, Prices, Consumption (Economics), Criticism and interpretation, Supply-side economics, Supply and demand, Demand (Economics)

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Efficient congestion tolls in the presence of unpriced congestion: a peak and off-peak simulation model

Article Abstract:

Liu's (1995) congestion pricing simulation model is employed to investigate optimal first-best, second-best and profit-maximizing one-route congestion tolls in which only some lanes are subject to such tolls while others are not. This is the set up of California's State Route 91 where only two of six lanes, one in each direction, collect congestion tolls. Such a policy draws attention to a number of serious issues, including the efficient congestion toll under constrained congestion pricing, the effects of the congestion toll on the traffic volume allocation and the possible welfare gain produced by the efficient congestion toll. The findings indicate that only about 10% of the potential welfare gain from congestion pricing can be enjoyed under constrained congestion pricing conditions.

Regulation and Administration of Transportation Programs, Transportation Programs-State, California, Transportation policy

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Should road users pay the full cost of road provision?

Article Abstract:

This article discusses the uniform tolling regime to pay for road provisions. The author, examining road use by two separate groups at different times, argues a uniform toll does not provide optimal results and suggests a discriminating congestion charge be applied to improve the efficiency of road use.

United States, Analysis, Economic aspects

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