Forecasting annual inflation with seasonal monthly data: using levels versus logs of the underlying price index

This paper investigates whether using natural logarithms (logs) of price indices for forecasting inflation rates is preferable to employing the original series. Univariate forecasts for annual inflation rates for a number of European countries and the USA based on monthly seasonal consumer price indices are considered. Stochastic seasonality and deterministic seasonality models are used. In many cases, the forecasts based on the original variables result in substantially smaller root mean squared errors than models based on logs. In turn, if forecasts based on logs are superior, the gains are typically small. This outcome sheds doubt on the common practice in the academic literature to forecast inflation rates based on differences of logs.

Defining user perception of distributed multimedia quality

This article presents the results of a study that explored the human side of the multimedia experience. We propose a model that assesses quality variation from three distinct levels: the network, the media and the content levels; and from two views: the technical and the user perspective. By facilitating parameter variation at each of the quality levels and from each of the perspectives, we were able to examine their impact on user quality perception. Results show that a significant reduction in frame rate does not proportionally reduce the user's understanding of the presentation independent of technical parameters, that multimedia content type significantly impacts user information assimilation, user level of enjoyment, and user perception of quality, and that the device display type impacts user information assimilation and user perception of quality. Finally, to ensure the transfer of information, low-level abstraction (network-level) parameters, such as delay and jitter, should be adapted; to maintain the user's level of enjoyment, high-level abstraction quality parameters (content-level), such as the appropriate use of display screens, should be adapted.

How level and type of deafness affects user perception of multimedia video clips

Our research investigates the impact that hearing has on the perception of digital video clips, with and without captions, by discussing how hearing loss, captions and deafness type affects user QoP (Quality of Perception). QoP encompasses not only a user's satisfaction with the quality of a multimedia presentation, but also their ability to analyse, synthesise and assimilate informational content of multimedia . Results show that hearing has a significant effect on participants’ ability to assimilate information, independent of video type and use of captions. It is shown that captions do not necessarily provide deaf users with a ‘greater level of information’ from video, but cause a change in user QoP, depending on deafness type, which provides a ‘greater level of context of the video’. It is also shown that post-lingual mild and moderately deaf participants predict less accurately their level of information assimilation than post-lingual profoundly deaf participants, despite residual hearing. A positive correlation was identified between level of enjoyment (LOE) and self-predicted level of information assimilation (PIA), independent of hearing level or hearing type. When this is considered in a QoP quality framework, it puts into question how the user perceives certain factors, such as ‘informative’ and ‘quality’.

Designer buildings: an evaluation of the price impacts of signature architects

This study investigates whether commercial offices designed by signature architects in the United States achieve rental premiums compared to commercial offices designed by nonsignature architects. Focusing on buildings designed by winners of the Prizker Prize and the Gold Medal awarded by the American Institute of Architects, we create a sample of commercial office buildings designed by signature architects drawing on CoStar's national database. We use a combination of hedonic regression model and a logit model to estimate the various rent determinants. While the first stage measures the typical rental price differential above the typical building in a particular sub-market over a specific timeframe, the second stage identifies a potential price differential over a set of buildings closely matched on important characteristics (such as age, size, location etc.). We find that in both stages offices design by signature architects exhibit a premium. However these results are preliminary. The premium could be indeed an effect of the name of the architect, but others factors such as micro-market conditions might be the cause. Further tests are needed to confirm the validity of our results.

Green noise or green value? Measuring the price effects of environmental certification in commercial buildings

This paper investigates the price effects of environmental certification on commercial real estate assets. It is argued that there are likely to be three main drivers of price differences between certified and non-certified buildings. First, certified buildings offer a bundle of benefits to occupiers relating to business productivity, image and occupancy costs. Second, due to these occupier benefits, certified buildings can result in higher rents and lower holding costs for investors. Third, certified buildings may require a lower risk premium. Drawing upon the CoStar database of US commercial real estate assets, hedonic regression analysis is used to measure the effect of certification on both rent and price. We first estimate the rental regression for a sample of 110 LEED and 433 Energy Star as well as several thousand benchmark buildings to compare the sample to. The results suggest that, compared to buildings in the same metropolitan region, certified buildings have a rental premium and that the more highly rated that buildings are in terms of their environmental impact, the greater the rental premium. Furthermore, based on a sample of transaction prices for 292 Energy Star and 30 LEED-certified buildings, we find price premia of 10% and 31% respectively compared to non-certified buildings in the same metropolitan area

Perception and haptics

For people with motion impairments, access to and independent control of a computer can be essential. Symptoms such as tremor and spasm, however, can make the typical keyboard and mouse arrangement for computer interaction difficult or even impossible to use. This paper describes three approaches to improving computer input effectivness for people with motion impairments. The three approaches are: (1) to increase the number of interaction channels, (2) to enhance commonly existing interaction channels, and (3) to make more effective use of all the available information in an existing input channel. Experiments in multimodal input, haptic feedback, user modelling, and cursor control are discussed in the context of the three approaches. A haptically enhanced keyboard emulator with perceptive capability is proposed, combining approaches in a way that improves computer access for motion impaired users.

The price of space: the convergence of value in use and value in exchange

This paper discusses concepts of value from the point of view of the user of the space and the counter view of the provider of the same. Land and property are factors of production. The value of the land flows from the use to which it is put, and that in turn, is dependent upon the demand (and supply) for the product or service that is produced/provided from that space. If there is a high demand for the product (at a fixed level of supply), the price will increase and the economic rent for the land/property will increase accordingly. This is the underlying paradigm of Ricardian rent theory where the supply of land is fixed and a single good is produced. In such a case the rent of land is wholly an economic rent. Economic theory generally distinguishes between two kinds of price, price of production or “value in use” (as determined by the labour theory of value), and market price or “value in exchange” (as determined by supply and demand). It is based on a coherent and consistent theory of value and price. Effectively the distinction is between what space is ‘worth’ to an individual and that space’s price of exchange in the market place. In a perfect market where any individual has access to the same information as all others in the market, price and worth should coincide. However in a market where access to information is not uniform, and where different uses compete for the same space, it is more likely that the two figures will diverge. This paper argues that the traditional reliance of valuers to use methods of comparison to determine “price” has led to an artificial divergence of “value in use” and “value in exchange”, but now such comparison are becoming more difficult due to the diversity of lettings in the market place, there will be a requirement to return to fundamentals and pay heed to the thought process of the user in assessing the worth of the space to be let.

Valuation and arbitrage

The use of discounted cash flow (DCF) methods in investment valuation and appraisal is argued by many academics as being rational and more rigorous than the traditional capitalisation model. However those advocates of DCF should be cautious in their claims for rationality. The various DCF models all rely upon an all-encompassing equated yield (IRR) within the calculation. This paper will argue that this is a simplification of the risk perception which the investor places on the income profile from property. In determining the long term capital value of a property an 'average' DCF method will produce the 'correct' price, however, the individual short term values of each cash-flow may differ significantly. In the UK property market today, where we are facing a period in which prices are not expected to rise generally at the same rate or with such persistence as hitherto, investors and tenants are increasingly concerned with the down side implications of rental growth and investors may indeed be interested in trading property over a shorter investment horizon than they had originally planned. The purpose of this paper is therefore to bring to the analysis a rigorous framework which can be used to analyse the constituent cash flows within the freehold valuation. We show that the arbitrage analysis lends itself to segregating the capital value of the cash flows in a way which is more appropriate for financial investors

The Farm-Retail Price Spread in an Imperfectly Competitive Food Industry

Gardner's popular model of perfect competition in the marketing sector is extended to a conjectural-variations oligopoly with endogenous entry. Revising Gardner's comparative statics on the "farm-retail price ratio," tests of hypotheses about food industry conduct are derived. Using data from a recent article by Wohlgenant, which employs Gardner's framework, tests are made of the validity of his maintained hypothesis-that the food industries are perfectly competitive. No evidence is found of departures from competition in the output markets of the food industries of eight commodity groups: (a) beef and veal, (b) pork, (c) poultry, (d) eggs, (e) dairy, (f) processed fruits and vegetables, (g) fresh fruit, and (h) fresh vegetables.

Dynamic analysis of house price diffusion across Asian financial centres

The aim of this paper is to explore effects of macroeconomic variables on house prices and also, the lead-lag relationships of real estate markets to examine house price diffusion across Asian financial centres. The analysis is based on the Global Vector Auto-Regression (GVAR) model estimated using quarterly data for six Asian financial centres (Hong Kong, Tokyo, Seoul, Singapore, Taipei and Bangkok) from 1991Q1 to 2011Q2. The empirical results indicate that the global economic conditions play significant roles in shaping house price movements across Asian financial centres. In particular, a small open economy that heavily relies on international trade such as – Singapore and Tokyo - shows positive correlations between economy’s openness and house prices, consistent with the Balassa-Samuelson hypothesis in international trade. However, region-specific conditions do play important roles as determinants of house prices, partly due to restrictive housing policies and demand-supply imbalances, as found in Singapore and Bangkok.

Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy

One of the most common Demand Side Management programs consists of Time-of-Use (TOU) tariffs, where consumers are charged differently depending on the time of the day when they make use of energy services. This paper assesses the impacts of TOU tariffs on a dataset of residential users from the Province of Trento in Northern Italy in terms of changes in electricity demand, price savings, peak load shifting and peak electricity demand at substation level. Findings highlight that TOU tariffs bring about higher average electricity consumption and lower payments by consumers. A significant level of load shifting takes place for morning peaks. However, issues with evening peaks are not resolved. Finally, TOU tariffs lead to increases in electricity demand for substations at peak time.

Climate change, extreme weather events and issues of human perception

The central proposition of Toby Pillatt is that in developing an understanding of past human affairs weather is as important as, or more so than, climate. Climate may be simply defined as average weather, whilst weather is the day-to-day occurrence of atmospheric phenomena which impact in perceptible ways on people's lives. The general proposition is sound enough; the challenges come in implementing these ideas in ways which advance our understanding of past people–environment relationships.

The impact of price promotions on producer strategies in markets with large product heterogeneity

Although current research indicates that increasing the number of options has negative effects on the cognitive ability of consumers, little understanding has been given to the consequences on producers and their strategic behavior. This article tests whether a large portfolio of products is beneficial to producers by observing UK consumer response to price promotions. The article shows that discounts induce mainly segment switching (74% of the total impact), with a limited effect on stockpiling (26%) and no impact on purchase incidence. Consequently, consumers prefer to “follow the discount” rather than purchase multiple units of the same wine. This result seems to explain the current structure of the market, and suggests that discounts may conflict with segment loyalty, a situation that disfavors producers, particularly in very populated segments. Results also casts doubts on the economic sustainability of competition based on an intense product differentiation in the wine sector.