Copyright (c) 2009 All rights reserved. http://works.bepress.com/david_clark1 Recent documents in David E. Clark en-us Sat, 10 Oct 2009 23:34:05 PDT 3600 http://works.bepress.com/david_clark1/4 http://works.bepress.com/david_clark1/4 Fri, 09 Oct 2009 13:16:03 PDT Although the US airline industry began 2001 with 24 consecutive profitable quarters, including net profits in 2000 totaling $7.9 billion, the impact of the 9/11 event on the industry was substantial. Whereas the recession that began in early 2001 signaled the end of profitability, the 9/11 terrorist attacks pushed the industry into financial crisis after air travel dropped 20% over the September-December 2001 period compared to the same period in 2000. Given the decline in domestic air travel, an important question is whether the detrimental impact of the attacks was temporary or permanent. That is, did airline travel return to the trend that existed prior to the terrorist attacks? There are theoretical reasons to the believe that it would not. Economists have long viewed travel-mode choices as the outcome of a comparison of opportunity costs and benefits. Thus, anything that permanently raises the opportunity cost of travel, holding benefits constant, should reduce the level of travel volume. To determine whether air travel was permanently reduced, we use econometric and time-series forecasting models to generate a counter-factual forecast of air travel volume in the absence of the terrorist attacks. These dynamic forecasts are compared to actual air travel levels to determine the impact of the terrorist attacks. The findings suggest that domestic air travel did not return to the levels that would have existed in the absence of the attack. Scott S. Blunk http://works.bepress.com/david_clark1/3 http://works.bepress.com/david_clark1/3 Fri, 09 Oct 2009 12:32:52 PDT Spatial equilibrium models rely on migration to arbitrage away differences in utility across locations net of moving costs, where remaining differences in wages and rents reflect the compensating differentials related to site-specific amenities. Recent refinements to the spatial equilibrium model focus upon the prospect of disequilibrium in amenity markets. Amenity market disequilibrium implies over- or under-compensation (incomplete compensation) across some locations, which suggests a role for these factors in subsequent migration. This paper follows the theoretical and empirical approach of Clark, Herrin, Knapp, and White (2003). An intercity wage regression is estimated where fixed effects capture the impact of site characteristics on wages. We then regress the fixed effects on a comprehensive vector of site attributes, where the residuals capture incomplete compensation in wages. The derived measures of incomplete compensation are included in a binary logit model of migration. The results provide further evidence that incomplete compensation for site characteristics is a significant factor in migration decisions, and the findings are consistent with tendencies toward spatial equilibrium. David E. Clark http://works.bepress.com/david_clark1/2 http://works.bepress.com/david_clark1/2 Fri, 09 Oct 2009 12:23:16 PDT Studies conducted by the Federal Railroad Administration in the 1990s reveal that train whistle bans lead to higher accident rates at train crossings. However, advocates of these bans argue that they eliminate noise externalities that have a detrimental effect on residential home values. To assess this latter claim, an event study is conducted and hedonic models are estimated for three different areas in which Conrail unilaterally began ignoring local whistle bans. While the findings consistently show that proximity to rail lines has a negative and statistically important influence on home values, there is little evidence that the Conrail decision had any permanent and appreciable influence on the housing values in these communities. In two of the three study areas, there is no statistically significant impact of the Conrail action, and in the third area, the effects are found to be temporary in duration. David Clark http://works.bepress.com/david_clark1/1 http://works.bepress.com/david_clark1/1 Fri, 09 Oct 2009 11:40:48 PDT This paper develops and applies a space-based strategy for overcoming the general problem of getting at the demand for non-market goods. It focuses specifically on evaluating one form of environmental quality, distance from EPA designated environmental hazards, via the single-family housing market in the Puget Sound region of Washington State. A spatial two stage hedonic price analysis is used to: (1) estimate the marginal implicit price of distance from air release sites, hazardous waste generators, hazardous waste handlers, superfund sites, and toxic release sites; and (2) estimate a series of demand functions describing the relationship between the price of distance and the quantity consumed. The analysis, which represents a major step forward in the valuation of environmental quality, reveals that the information needed to identify second-stage demand functions is hidden right in plain site -- hanging in the aether of the regional housing market. David Clark