Assessing the suitability of market approach valuation methods for mine and quarry valuations

An area of property valuation that has attracted less attention than other property markets over the past 20 years has been the mining and extractive industries. These operations can range from small operators on leased or private land to multinational companies. Although there are a number of national mining standards that indicate the type of valuation methods that can be adopted for this asset class, these standards do not specify how or when these methods are best suited to particular mine operations. The RICS guidance notes and the draft IVSC guidance notes also advise the various valuations methods that can be used to value mining properties; but, again they do not specify what methods should be applied where and when. One of the methods supported by these standards and guidelines is the market approach. This paper will carry out an analysis of all mine, extractive industry and waste disposal sites sale transactions in Queensland Australia, a major world mining centre, to determine if a market valuation approach such as direct comparison is actually suitable for the valuation of a mine or extractive industry. The analysis will cover the period 1984 to 2011 and covers sale transactions for minerals, petroleum and gas, waste disposal sites, clay, sand and stone. Based on this analysis, the suitability of direct comparison for valuation purposes in this property sector will be tested.

The Economics of Gasification: A Market-Based Approach

This paper deals with the economics of gasification facilities in general and IGCC power plants in particular. Regarding the prospects of these systems, passing the technological test is one thing, passing the economic test can be quite another. In this respect, traditional valuations assume constant input and/or output prices. Since this is hardly realistic, we allow for uncertainty in prices. We naturally look at the markets where many of the products involved are regularly traded. Futures markets on commodities are particularly useful for valuing uncertain future cash flows. Thus, revenues and variable costs can be assessed by means of sound financial concepts and actual market data. On the other hand, these complex systems provide a number of flexibility options (e.g., to choose among several inputs, outputs, modes of operation, etc.). Typically, flexibility contributes significantly to the overall value of real assets. Indeed, maximization of the asset value requires the optimal exercise of any flexibility option available. Yet the economic value of flexibility is elusive, the more so under (price) uncertainty. And the right choice of input fuels and/or output products is a main concern for the facility managers. As a particular application, we deal with the valuation of input flexibility. We follow the Real Options approach. In addition to economic variables, we also address technical and environmental issues such as energy efficiency, utility performance characteristics and emissions (note that carbon constraints are looming). Lastly, a brief introduction to some stochastic processes suitable for valuation purposes is provided.

Environmental information provision, market valuation, and firm incentives: An empirical study of the Japanese PRTR system

The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution. © 2010 by the Board of Regents of the University of Wisconsin System.

Small firm internet adoption: A market oriented approach

Fundamental to the development of new customer value offerings via web-based commerce is a small firm's ability to strategically acquire and exploit knowledge. The focus of this paper is the empirical testing of a normative web-based commerce adoption model developed from a review of the extant literature related to electronic marketing, the Internet and the diffusion of new innovations. A preliminary test of the model's theoretical contentions lent support to its overall focus, but found that the firm's existing learning capabilities were diminished during the adoption of web-based commerce. Consequently, sub-optimal adoption outcomes were associated with insufficient knowledge development.

Carbon sequestration: Evaluating the impact on rural land and valuation approach

This thesis uses semi-structured interviews and documentary analysis to explore the impact of carbon sequestration rights on rural land in Queensland and to determine whether current rural valuation knowledge and practice is equipped to deal with these rights. The carbon right in Queensland is complex and subject to significant individual variation. The nature and form of this right will determine whether it has a positive or negative impact on Queensland rural land. Significant gaps in the knowledge of industry stakeholders, including rural valuers, concerning carbon rights were found, and recommendations for valuation practice were made.

Measuring the value to the public of pig welfare improvements: a contingent valuation approach

The welfare of farm animals is a policy area that has increased greatly in importance in recent years. When deciding whether a proposed policy should be implemented, it can be useful for policymakers to compare the costs of the proposed improvement with the perceived benefits. The costs are relatively straightforward to calculate but little is known about the benefits. The Contingent Valuation Method (CVM), a direct survey-based method, can be used to shed some light on this. This approach elicits the willingness-to-pay (WTP) for the provision of some public good or service. This paper reports the results of a contingent valuation study of the value of welfare improvements for growing pigs. Attitudes and opinions with regard to form animal welfare are explored and WTP elicited for various pig welfare improvements including increases in space allowance, environmental enrichment and research into improved pig housing design. The results reveal a positive WTP for these improvements. However, it is also noteworthy that a significant proportion of the general public is willing to pay nothing for these improvements. Overall, the study illustrates the usefulness of the CVM approach as a tool for policymakers in assessing the merits of possible policy initiatives affecting the welfare of animals.

Food marketing technology and contingency market valuation

Marketing activities are introduced into a rational expectations model of the food marketing system. The model is used to evaluate effects of alternative marketing technologies on the distribution of the benefits of contingency markets in agriculture. Benefits depend on two parameters: the cost share of farm inputs and the elasticity of substitution between farm and nonfarm inputs in food marketing. Over a broad spectrum of technologies, consumers are likely to be the net beneficiaries and farmers the net losers from the provision of contingency markets

Non-market valuation of natural and environmental resources in Central America and the Caribbean

Includes bibliography

The market valuation of environmental capital expenditures by pulp and paper companies

The objective of this study is to examine the market valuation of environmental capital expenditure investment related to pollution abatement in the pulp and paper industry. The total environmental capital expenditure of $8.7 billion by our sample firms during 1989-2000 supports the focus on this industry. In order to be capitalized, an asset should be associated with future economic benefits. The existing environmental literature suggests that investors condition their evaluation of the future economic benefits arising from environmental capital expenditure on an assessment of the firms' environmental performance. This literature predicts the emergence of two environmental stereotypes: low-polluting firms that overcomply with existing environmental regulations, and high-polluting firms that just meet minimal environmental requirements. Our valuation evidence indicates that there are incremental economic benefits associated with environmental capital expenditure investment by low-polluting firms but not high-polluting firms. We also find that investors use environmental performance information to assess unbooked environmental liabilities, which we interpret to represent the future abatement spending obligations of high-polluting firms in the pulp and paper industry. We estimate average unbooked liabilities of $560 million for high-polluting firms, or 16.6 percent of market capitalization.

Resource allocation in decentralised computational systems:an evolutionary market-based approach

We present a novel market-based method, inspired by retail markets, for resource allocation in fully decentralised systems where agents are self-interested. Our market mechanism requires no coordinating node or complex negotiation. The stability of outcome allocations, those at equilibrium, is analysed and compared for three buyer behaviour models. In order to capture the interaction between self-interested agents, we propose the use of competitive coevolution. Our approach is both highly scalable and may be tuned to achieve specified outcome resource allocations. We demonstrate the behaviour of our approach in simulation, where evolutionary market agents act on behalf of service providing nodes to adaptively price their resources over time, in response to market conditions. We show that this leads the system to the predicted outcome resource allocation. Furthermore, the system remains stable in the presence of small changes in price, when buyers' decision functions degrade gracefully. © 2009 The Author(s).