The elasticity of demand is about occupancy, not prices: building European demand curves based on occupancy elasticity

The peak congestion of the European grid may create significant impacts on system costs because of the need for higher marginal cost generation, higher cost system balancing and increasing grid reinforcement investment. The use of time of use rates, incentives, real time pricing and other programmes, usually defined as Demand Side Management (DSM), could bring about significant reductions in prices, limit carbon emissions from dirty power plants, and improve the integration of renewable sources of energy. Unlike previous studies on elasticity of residential electricity demand under flat tariffs, the aim of this study is not to investigate the known relatively inelastic relationship between demand and prices. Rather, the aim is to assess how occupancy levels vary in different European countries. This reflects the reality of demand loads, which are predominantly determined by the timing of human activities (e.g. travelling to work, taking children to school) rather than prices. To this end, two types of occupancy elasticity are estimated: baseline occupancy elasticity and peak occupancy elasticity. These represent the intrinsic elasticity associated with human activities of single residential end-users in 15 European countries. This study makes use of occupancy time-series data from the Harmonised European Time Use Survey database to build European occupancy curves; identify peak occupancy periods; draw time use demand curves for video and TV watching activity; and estimate national occupancy elasticity levels of single-occupant households. Findings on occupancy elasticities provide an indication of possible DSM strategies based on occupancy levels and not prices.

Farm income, population and farmland prices: a relative information approach

This paper uses an entropy-based information approach to determine if farmland values are more closely associated with urban pressure or farm income. The basic question is: how much information on changes in farm real estate values is contained in changes in population versus changes in returns to production agriculture? Results suggest population is informative, but changes in farmland values are more strongly associated with changes in the distribution of returns. However, this relationship is not true for every region nor does it hold over time, as for some regions and time periods changes in population are more informative. Results have policy implications for both equity and efficiency.

The case of negative day-ahead electricity prices

In recent years, Germany has significantly increased its share of electricity produced from renewable sources, which is mainly due to the Renewable Energy Act (EEG). The EEG substantially impacts the dynamics of intra-day electricity prices by increasing the likelihood of negative prices. In this paper, we present a non-Gaussian process to model German intra-day electricity prices and propose an estimation procedure for this model. Most importantly, our model is able to generate extreme positive and negative spikes. A simulation study demonstrates the ability of our model to capture the characteristics of the data.

Eco-labeling, rents, sales prices and occupancy rates: do LEED and Energy Star labeled offices obtain multiple premiums?

Drawing upon an updated and expanded dataset of Energy Star and LEED labeled commercial offices, this paper investigates the effect of eco-labeling on rental rates, sale prices and occupancy rates. Using OLS and robust regression procedures, hedonic modeling is used to test whether the presence of an eco-label has a significant positive effect on rental rates, sale prices and occupancy rates. The study suggests that estimated coefficients can be sensitive to outlier treatment. For sale prices and occupancy rates, there are notable differences between estimated coefficients for OLS and robust regressions. The results suggest that both Energy Star and LEED offices obtain rental premiums of approximately 3%. A 17% sale price premium is estimated for Energy Star labeled offices but no significant sale price premium is estimated for LEED labeled offices. Surprisingly, no significant occupancy premium is estimated for Energy Star labeled offices and a negative occupancy premium is estimated for LEED labeled offices.

The dynamics of asset prices and transaction activity in illiquid markets: the case of private commercial real estate

This paper investigates the relationship between capital flows, turnover and returns for the UK private real estate market. We examine a number of possible implication of capital flows and turnover on capital returns testing for evidence of a price pressure effect, ‘return chasing’ behaviour and information revelation. The main tool of analysis is a panel vector autoregressive (VAR) regression model in which institutional capital flows, turnover and returns are specified as endogenous variables in a two equation system in which we also control for macro-economic variables. Data on flows, turnover and returns are obtained for the 10 market segments covering the main UK commercial real estate sectors. Our results do not support the widely-held belief among practitioners that capital flows have a ‘price pressure’ effect. Although there is some evidence of return chasing behaviour, the short timescales involved suggest this finding may be due to delayed recording of flows relative to returns given the difficulties of market entry. We find a significant positive relationship between lagged turnover and contemporaneous capital returns, suggesting that asset turnover provides pricing information.

Are property prices non-linear? An investigation of the behaviour of US REITs and UK property company shares

Linear models of market performance may be misspecified if the market is subdivided into distinct regimes exhibiting different behaviour. Price movements in the US Real Estate Investment Trusts and UK Property Companies Markets are explored using a Threshold Autoregressive (TAR) model with regimes defined by the real rate of interest. In both US and UK markets, distinctive behaviour emerges, with the TAR model offering better predictive power than a more conventional linear autoregressive model. The research points to the possibility of developing trading rules to exploit the systematically different behaviour across regimes.

Standardised ileal digestibility of crude protein and amino acids of UK-grown peas and faba beans by broilers

In view of the increasing interest in home-grown legumes as components of diets for non-ruminant livestock and in an attempt to reduce the reliance on imported soya bean meal (SBM), two experiments were conducted to evaluate samples of peas and faba beans for their standardised ileal digestibility (SID) of amino acids determined with young broiler chicks. Experiment 1 evaluated six faba bean and seven pea cultivars and Experiment 2 evaluated two faba bean and three pea cultivars as well as a sample of soya bean meal provided as a reference material. Peas and beans were added at 750g/kg as the only source of protein/amino acids in a semi-synthetic diet containing the inert marker titanium dioxide; SBM was added, in a control diet, at 500g/kg. Each diet was fed to six replicates of a cage containing two Ross-type broilers for 96h at which point birds were culled allowing removal of ileal digesta. Chemical analyses allowed the calculation of the coefficient of SID of amino acids. There were no differences between samples of the same pulse species (P>0.05) but peas had higher values (P<0.05), similar to SBM, than beans. Trypsin inhibitor content (expressed as g trypsin inhibitor units/mg sample) of all pea samples was low and in the range 0.83–1.77mg/kg. There was relatively little variation in bean tannin content and composition amongst the coloured-flowered varieties; however, the white-flowered cultivar had no tannins. There was no correlation between tannin content and coefficient of SID. The content of SID of amino acids (g/kg legume) was higher in SBM when compared with peas and beans by virtue of having higher total concentrations.

Assessment of the anti-genotoxic, anti-proliferative, and anti-metastatic potential of crude watercress extract in human colon cancer cells

Although it is known to be a rich source of the putative anti-cancer chemicals isothiocyanates, watercress has not been extensively studied for its cancer preventing properties. The aim of this study was to investigate the potential chemoprotective effects of crude watercress extract toward three important stages in the carcinogenic process, namely initiation, proliferation, and metastasis (invasion) using established in vitro models. HT29 cells were used to investigate the protective effects of the extract on DNA damage and the cell cycle. The extract was not genotoxic but inhibited DNA damage induced by two of the three genotoxins used, namely hydrogen peroxide and fecal water, indicating the potential to inhibit initiation. It also caused an accumulation of cells in the S phase of the cell cycle indicating (possible) cell cycle delay at this stage. The extract was shown to significantly inhibit invasion of HT115 cells through matrigel. Component analysis was also carried out in an attempt to determine the major phytochemicals present in both watercress leaves and the crude extract. In conclusion, the watercress extract proved to be significantly protective against the three stages of the carcinogenesis process investigated.

Urban Growth Boundaries and their impact on land prices

Investigation of the effects of Urban Growth Boundaries (UGB) on land prices are restricted by a lack of good land market data. However, undeveloped land transactions at the urban fringe of the Melbourne metropolitan area in Australia are recorded in a data set that enables exploration of the impact of its UGB. Estimation can take account of endogeneity issues, while controlling for policy anticipation effects and other potential influences on land prices. OLS and instrumental variable estimates indicate that land prices rose substantially inside the UGB after its enactment in 2003 but did not rise much outside of it.

The distribution of London residential property prices and the role of spatial lock-in

Much of mainstream economic analysis assumes that markets adjust smoothly, through prices, to changes in economic conditions. However, this is not necessarily the case for local housing markets, whose spatial structures may exhibit persistence, so that conditions may not be those most suited to the requirements of modern-day living. Persistence can arise from the existence of transaction costs. The paper tests the proposition that housing markets in Inner London exhibit a degree of path dependence, through the construction of a three-equation model, and examines the impact of variables constructed for the 19th and early 20th centuries on modern house prices. These include 19th-century social structures, slum clearance programmes and the 1908 underground network. Each is found to be significant. The tests require the construction of novel historical datasets, which are also described in the paper.

The (de)merits of minimum-variance hedging: application to the crack spread

We study the empirical performance of the classical minimum-variance hedging strategy, comparing several econometric models for estimating hedge ratios of crude oil, gasoline and heating oil crack spreads. Given the great variability and large jumps in both spot and futures prices, considerable care is required when processing the relevant data and accounting for the costs of maintaining and re-balancing the hedge position. We find that the variance reduction produced by all models is statistically and economically indistinguishable from the one-for-one “naïve” hedge. However, minimum-variance hedging models, especially those based on GARCH, generate much greater margin and transaction costs than the naïve hedge. Therefore we encourage hedgers to use a naïve hedging strategy on the crack spread bundles now offered by the exchange; this strategy is the cheapest and easiest to implement. Our conclusion contradicts the majority of the existing literature, which favours the implementation of GARCH-based hedging strategies.