In environmental economics, hedonic property value (HPV) models have often employed distance from a localized environmental disamenity as a proxy for perceived risk. The magnitude of a distance effect on housing prices, however, may depend upon the direction in which it is being measured. We generalize conventional distance models to allow for continuously varying directional effects by converting from Cartesian to polar coordinates. A simple empirical example (for housing prices around Woburn, Massachusetts, between 1988 and 1996) illustrates how failure to allow for directional heterogeneity can obscure otherwise statistically significant distance effects in HPV.
Medium- to long-run price elasticities of demand for water are higher than short-run studies suggest. We examine data from the Los Angeles Department of Water and Power's 1983 residential energy survey. Households' decisions to install shower retrofit devices are influenced by the potential to save money on water heating bills. We attribute toilet retrofit decisions more to noneconomic factors which might be characterized as “general conservation mindedness.”
This paper examines medium-run adjustments to the existing housing stock, focusing on discrete energy conservation "retrofits" such as insulation and storm windows. Individual household data are employed in a two-level nested logit model to estimate a translog indirect utility function. Simulations reveal considerable sensitivity of the demand for retrofits to their own prices, to relative energy prices and to changes in real incomes.