Jon P. Nelson

The Use (and Abuse) of Meta-Analysis in Environmental and Natural Resource Economics: An Assessment

Motivated by the 2006 report of a Work Group appointed by the Environmental Protection Agency (EPA), this paper examines the present state of meta-analysis in environmental economics and offers recommendations for its future use. To this end we summarize and assess 140 meta-analyses from 125 published and unpublished studies, covering 17 topical categories in environmental and resource economics. First, we provide several generic meta-analysis models as reference points and discuss major estimation issues. Five econometric issues are identified as part of a complete analysis: (1) sample selection criteria; (2) basic data summary; (3) primary data heterogeneity; (4) heteroskedasticity; and (5) non-independence of multiple observations from primary studies. Second, a tabular summary is presented for the 140 meta-analyses with respect to estimation methods. Third, a narrative summary is presented for 19 meta-analyses, including the three value-of-statistical-life studies examined by the EPA Work Group and one analysis from each of 16 other categories. Fourth, we offer a set of “best practice” guidelines for future meta-analyses in this and other areas of economics. Last, the paper comments on the use of meta-analytic methods for benefit transfers of environmental values.

Residential choice, hedonic prices, and the demand for urban air quality☆

Abstract This paper uses a two-step estimation procedure suggested by Sherwin Rosen to estimate structural demand and supply equations for urban air quality. In the first step, a hedonic price equation is estimated for residential property values for the Washington, D. C., SMSA for 1970. In the second step, a set of marginal hedonic prices is generated. These prices and the quantity of clean air (reciprocal of air pollution) are used as endogenous variables in a simultaneous equation model. Empirical results indicate a price elasticity of demand between −1.2 and −1.4 and a unitary income elasticity.

Meta-Analysis Of Economics Research Reporting Guidelines

Meta‐regression analysis (MRA) can provide objective and comprehensive summaries of economics research. Their use has grown rapidly over the last few decades. To improve transparency and to raise the quality of MRA, the meta‐analysis of economics research‐network (MAER‐Net) has created the below reporting guidelines. Future meta‐analyses in economics will be expected to follow these guidelines or give valid reasons why a meta‐analysis must deviate from them.

Grade Inflation, Real Income, Simultaneity, and Teaching Evaluations

Nelson and Lynch investigate whether instructors can improve their evaluation by students by giving higher grades and whether reductions in the real income of teachers lead to a deterioration of grading standards. In the process, the authors conclude from their data that simultaneous equation estimates are to be preferred to those obtained from a single equation model.

Advertising Bans, Monopoly, and Alcohol Demand: Testing for Substitution Effects using State Panel Data

Using a panel of 45 states for the period 1982-97, this study analyzes the importance of several restrictive alcohol regulations, including advertising bans for billboards, bans of price advertising, state monopoly control of retail stores, and changes in the minimum legal drinking age. In contrast to previous research, the study allows for substitution among beverages as a response to a regulation that targets a specific beverage. A restrictive law that applies only to one beverage (or one form of advertising) can result in substitution toward other beverages (and other media). Allowing for substitution means that the net effect on total alcohol consumption is unceertain, and must be ascertained empirically. The empirical results demonstrate that monopoly control of spirits reduces consumption of that beverage, and increases consumption of wine. The effect on beer is positive, but is not statistically significant. The net effect on total alcohol is signifcantly negative. Higher minimum legal drinking age laws have negative effects on beverage and total alcohol consumption. Partial bans of advertising do not reduce total alcohol consumption, which reflects in part substitution effects.

Broadcast Advertising and U.S. Demand for Alcoholic Beverages

Quarterly data for 1977–1994 on alcohol consumption and advertising are used to estimate a differential demand system, including explanatory variables for broadcast advertising and print advertising. The model explains the growth rate of per capita consumption dependent on explanatory variables for prices, real income, demographic changes, and real advertising by media and beverage. Empirical results also are reported for total consumption of pure alcohol. The results for the three beverages and total alcohol indicate that advertising has little or no effect on demand. The empirical evidence thus supports the notion that regardless of media, advertising affects mainly brand shares.

Airport noise, location rent, and the market for residential amenities

Abstract The present study reports on the influence of aircraft noise on housing prices in the vicinity of six major U.S. airports, including San Francisco, St. Louis, Cleveland, New Orleans, San Diego, and Buffalo. The sampling procedures attempt to control for the effect of accessibility on location rent, and hence, housing prices. Regression results are reported for the individual samples and for a pooled sample consisting of 845 observations. The regression coefficients for aircraft noise are stable about their weighted mean and are comparable to coefficient estimates from the pooled sample. Dummy variables and partitioned regressions are used to test for remaining accessibility effects.

Advertising and US alcoholic beverage demand: system-wide estimates

The effects of advertising on consumption of alcoholic beverages in the US are analysed. The goal is to obtain evidence on the importance of advertising at the level of beverage demand(beer, wine, spirits) and for total consumption of alcohol (per capita gallons of ethanol). A three-equation conditional demand system is estimated that includes own- and cros-beverage advertising as explanatory variables. Four models of the differential demand system are estimated, including the Rotterdam, AID, CBS, and NBR models, using annual US data for the period 1964-90 on beverage consumption, prices, expednitures, and real advertising. Estimates are obtained of the complete matrix of own- and cross-elascities for each beverage’ price and advertising. At the beverage level, the results indicate a positive butr very small effect of advertising on beverage consumption, with most of the impact due to wine advertising and non due to beer advertising. There is no efect of advertising in the composite demand function for al...

Housing values, census estimates, disequilibrium, and the environmental cost of airport noise: A case study of Atlanta☆

Abstract Two unresolved issues about airport noise-property value studies are addressed. The first issue concerns the comparability of empirical results from aggregate census data vs individual sales values, and the second issue concerns the homogeneity and stability of results from housing price studies over time and across markets. Hedonic price models from two sets of data for a residential area near the Atlanta International Airport are estimated at two points in time 1979–1980 and 1970–1972. The available data yield similar estimates of the noise discount over time, and from the prices of individual house sales vs owner-appraised census block aggregates.

Economic and demographic factors in U.S. alcohol demand: A growth-accounting analysis

During the 1980s, per capita consumption of absolute ethanol in the U.S. declined by 14 percent. In 1979, consumption was 2.94 gallons per capita compared to 2.52 gallons in 1989. The objective of this paper is to explain the decline in consumption, both for total ethanol and by beverage. The historical growth of ethanol demand is decomposed into several components, with emphasis on the role of relative prices, real income, and demographic factors. Using the Rotterdam model of a demand system, I first estimate the conditional demand for ethanol for each of the three beverages (beer, wine, distilled spirits). Second, I estimate the composite demand for total ethanol. Both sets of estimates are obtained using quarterly data for the period 1974–90. The estimates are tested for conformity with the theoretical restrictions of homogeneity, symmetry, and negativity. The decomposition analysis indicates a positive net effect for the combined impact of autonomous trend, real income growth, and relative price changes, both for total ethanol and each of the three beverages. The negative growth of per capita ethanol consumption is attributable to an increase in the proportion of the population aged 65 and over and a simultaneous decline in the proportion of the population aged 18–29.