FINITE SAMPLE PROPERTIES OF NONSTATIONARY BINARY RESPONSE MODELS: A MONTE CARLO AND RESPONSE SURFACE ANALYSIS

This paper investigates the finite sample distributions of maximum likelihood estimators for nonstationary probit models. We find that, analogous to standard OLS models, commonly used tests statistics almost always reject the null hypothesis of no relationship between xt and a latent yt, even when they are, in fact, generated by independent random walks. However, if cointegrating relationships are present in the model, parameter distributions are better behaved and standard z and Wald test statistics are consistent.Binary choice, Probit models, Nonstationay processes, Research Methods/ Statistical Methods, C250,

SIMULATED MAXIMUM LIKELIHOOD FOR DOUBLE-BOUNDED REFERENDUM MODELS

Although joint estimation of referendum-type contingent value (CV) survey responses using maximum-likelihood models is preferred to single-equation estimation, it has been largely disregarded because estimation involves evaluating multivariate normal probabilities. New developments in the construction of probability simulators have addressed this problem, and simulated maximum likelihood (SML) for multiple-good models is now possible. This analysis applies SML for a three-good model under a double-bounded questioning format. Results indicate joint estimation substantially improves the variances of the parameters and willingness-to-pay estimates.Research Methods/ Statistical Methods,

OPTION WEALTH AND BEQUEST VALUES: THE VALUE OF PROTECTING FUTURE GENERATIONS FROM THE HEALTH RISKS OF NUCLEAR WASTE STORAGE

We devise a simple model of intergenerational altruism under uncertainty. We present an estimable form of the model that relies on a few, plausible, assumptions. We apply the model to data collected in a survey of Southern Nevadans concerning the proposed Yucca Mountain Nuclear Waste Repository in Nye County, NV. We find strong evidence of a bequest motive. Approximately one third of the option wealth lost by households near the repository can be attributed to costs to future generations.Resource /Energy Economics and Policy,

Business Stakeholders

6 PowerPoint slides Convener: William Smith, UNLV Session 3: Policy, Decision Making, and Outreach Abstract: -Understand the current attitudes about climate change in the Nevada business community -Help develop an advisory board that can serve as an ongoing link between the university and business community on climate change issues and policies -Provide an understanding about the information needs of different industries with respect to climate change -Develop channels to disseminate relevant climate change research to the business community -Develop a channel for business leaders to convey their concerns about climate-change policy cost

Concurrent panel session 1: Challenges of economic growth & diversification & labor preparation in Las Vegas

Moderator: Dr. Mel Jameson, UNLV College of Business Scribe: Angela Moor, UNLV Department of History Conference white paper & Full summary of panel session, 6 page

Are Housing Bubbles Contagious? A Case Study of Las Vegas and Los Angeles Home Prices

This paper asks whether speculative house-price pressure in an economic center can spill into related housing markets. In other words, are bubbles contagious? I develop a theoretical model that allows for speculative price appreciation to spread from one market to another. I estimate an error-correction model using quarterly housing data for Las Vegas and Los Angeles and fundamental market variables from 1978 Quarter 2 through 2008 Quarter 1. Las Vegas prices show significant persistence and adjust slowly to disequilibrium. Contagious price and income growth from the Los Angeles market sustained by naïve expectations contributed to the bubble that formed in Las Vegas

Uncertainty and measurement error in welfare models for risk changes

Most welfare models of environmental or mortality risk reductions assume that risks are exogenously determined and known with certainty. However, a growing body of research suggests that uncertainty about risks can affect choices over risky prospects. I present a decision-weighted random-utility model that decomposes welfare losses into those attributable to an increase in the deterministic component of risk and those attributable to uncertainty about risk. I apply the model to an illustrative dataset of subjects' perceived mortality risk and willingness to accept the risk of nuclear-waste transport. I estimate the model using Lewbel's (2000) strictly exogenous regressor approach to account for endogeneity bias and measurement error. Subjects display aversion to both risk and uncertainty about the risk of a transport accident, so that increases in either leads to social-welfare losses. Roughly 12% of the external cost of nuclear-waste transport is attributable to the public's uncertainty about transport risk.Risk and uncertainty Decision-weighted utility Subjective expected utility Nuclear-waste transport

Housing Market Dynamics Under Stochastic Growth: An Application to the Housing Market in Boulder, Colorado

Recent housing-market studies have modeled slow stock and price adjustment with some success. However, the empirical procedures used in these models break down if housing stocks or prices are driven by stochastic growth. In this paper I suggest an error-correction model for analyzing housing supply and demand under conditions of stochastic growth for a regional housing market. The model is applied to the housing market in Boulder, Colorado from 1981 through 1995—a period of rapid growth in housing values in the area. Long-run housing supply and demand are shown to be inelastic with respect to changes in the price of housing. The results indicate that developers respond more accurately to housing-market disequilibrium attributable to supply-side disturbances than to disturbances generated by changes in the demand for housing. On the other hand, price appreciation is driven primarily by demand disturbances. Copyright 2000 Blackwell Publishers