Ronald J. Krumm

Neighborhood amenities: An economic analysis

Abstract A spatial model of household and firm demand and supply of market goods is developed. Housing and neighborhood amenity markets are explicitly considered in deriving market equilibrium. The equilibrium relationships are empirically investigated, yielding important insights into the functioning of the urban economy. Attention is focused on externalities involved in neighborhood markets and the simultaneous determination of housing and amenity market equilibrium. The effect of neighborhood amenities on household equilibrium is of a major magnitude and effects of “externality” variables on both housing and amenity equilibrium are substantiated. The degree of neighborhood homogeneity and the extent of government programs aimed at neighborhood development are found to have significant impacts on housing and amenity markets.

Household tenure choice and migration

Abstract A model of the joint tenure choice and migration decision is estimated. Unlike previous work that has considered each decision separately or examined the premigration tenure status choice jointly with the migration decision, this analysis addresses change in tenure status as well. The empirical findings indicate that variables often thought to affect either or both tenure status of the residence location change decision have offsetting or augmenting effects on their joint probabilities which are masked if the decisions are examined independently.

Effects of homeownership on household savings

Abstract Causal effects of homeownership decisions on the level and composition of household savings accumulation are estimated. Genuine positive impacts on both total and nonhousing savings as a function of house value chosen are found. The findings suggest, however, that the homeownership decision in conjunction with choice of an average owner-occupied house value does not substantially alter the total amount of accumulated household savings.

Intertemporal tenure choices

Abstract An intertemporal model of household tenure choice is estimated using data from the Michigan Panel Survey on Income Dynamics. Unlike empirical studies that focus on household tenure differences at any point in time, this analysis considers choice patterns over a 4-year period. The estimation results often indicate substantial leads, lags, and household condition duration effects on the structure of tenure status choices and the timing of their change. An implication of these findings is that inferences based on analyses of tenure choice at one particular point in time often are misleading.

Morbidity and Pollution: Model Specification Analysis for Time-Series Data on Hospital Admissions

Time-series analysis of effects of pollutants on emergency hospital admissions indicates important synergistic interactions among pollutants and to a lesser degree nonlinearities in effects of single pollutants. Comparisons of alternative econometric specifications are made to determine the appropriateness of incorporating nonuniform pollution impacts. The data substantially support the existence of synergisms among pollutants with high levels of sulfur dioxide, SO, (particulates), increasing the impact of particulates (SO,) on emergency hospital admissions. Marginal effects of either pollutant are, however, small at current ambient air quality levels. These results indicate that damage estimates were likely to be understated during the 1960’s when pollution levels were high, while, at current levels of those pollutants considered here, marginal damages are lower than would be estimated in studies failing to incorporate synergistic and nonlinear impacts.

Household demand for home heating

Abstract The provision of home heating services involves choice of both a heating system and a fuel input. The decision is usefully analyzed by comparison of net benefits associated with optimal use of alternative system — fuel combinations which leads to adoption of that alternative with maximum net benefits. Calculation of total benefits involves examination of household demand characteristics for system and fuel inputs which is based on the public nature of consumption of heating services within the household. Costs associated with a particular system — fuel alternative are comprised of the cost of a system which is durable in nature and a fuel input cost. Using individual household data, empirical analysis of system and fuel adoption in newly constructed housing units indicates that fuel price differences and household demand characteristics play major roles in the decision process and that system and fuel choice are not independent. The results suggest that estimates of fuel and system adoption patterns based on aggregate data are incomplete and likely to be misleading in projection of future trends.

Regional Wage Differentials, Fluctuations in Labor Demand, and Migration

The structure of regional wage patterns over time is examined in the context of long-run equilibrium nominal wage differentials. Changes in regional demand for labor and the resulting short-run wage variation are analyzed in the context of the expected duration of the demand change. Cross sections of time series data on wages in selected manufacturing industries are utilized to control for systematic spatial differences in wage behavior and year-specific business cycle influences. Empirical results indicate important variations in wage patterns as a result of differences in the expected duration of labor demand and supply changes. The findings also suggest that migration has an important effect on regional wage patterns.

Durable good choice: A benefit-cost approach applied to air conditioning

Abstract A model of the household air conditioning adoption decision is developed which is based on the comparison of benefits and costs of alternative system choices. Based on this conceptual analysis, a discrete choice empirical model is estimated which distinguishes between adoption of room units and central air conditioning systems. The results indicate that factors influencing the structure of household benefits and system costs importantly affect the adoption decision in a systematic manner.

Durable good adoption and energy choice in multi-stage production processes : An empirical analysis of household appliances

Abstract A model of household clothes washing and drying demand and production is developed and empirically estimated with respect to adoption of clothes washers and dryers and the related clothes dryer energy choice. Using the multinomial logistic procedure, estimates are provided for choice unconditional as well as conditional on home heating energy choices. In all cases natural gas and electricity prices play a significant role in explaining not only clothes dryer energy choice but also whether or not a dryer and/or a washer is adopted in the housing unit. Household income, family size, housing structure age as well as climatic conditions are also found to figure prominently in explaining the adoption decision and energy choices.

Health and Air Quality: Evaluating the Effects of Policy.

The authors present an economic analysis of the problems of air pollution and their economic implications. They offer a legislative history of attempts to control air pollution, and emphasize that recent improvements in air quality have resulted from older legislation with low-cost control strategies. Noting that further reductions in air pollution will be more costly, the authors focus on ways to determine the point at which costs will exceed benefits and propose a methodology for evaluating air-quality legislation. They argue that a cost/benefit approach is essential for improved decision making. The presence of interactions and nonlinearities suggested by the data indicates that uniform pollution-control standards are inappropriate. 15 references, 6 figures, 19 tables.