Specific Objectives of the Project:

Our objective is to develop a method of valuation of state-owned resources and state-owned income streams. Examples are tax receipts and forestry sales. This project will help clarify the importance of California’s natural resources that provide income to the state, and will inform how these resources should be used. Our results will also advise policymakers as to whether California should invest in or divest from these industries.

Summary of Results:

We found that none of the standard portfolios correlate well with either tax returns or returns to forestry. These standard portfolios include the 23 Fama-French portfolios, the DOW Jones Industrial Average, the S&P 500, and the NASDAQ index. Tax returns do correlate slightly with state GDP. Forestry and tax returns are particularly difficult income streams to match to standard portfolios because data is typically only available at the annual level, or in the case of sales tax revenue at the monthly level. We also try to value these streams using a discount rate derived from single index models such as the capital asset pricing model. However, the lack of correlation between standard portfolios and the tax or forestry returns leads to the use of the sure rate of interest with no adjustment for risk.
Finding a monetary valuation for the difference between stable and unstable tax revenue streams, such as California’s versus that of Texas, could be very valuable for demonstrating to policymakers the importance of revenue type and tax structure for state budget stability. Further research is needed to find a valuation method for these income streams.

Specific Objectives of the Project

Can we explain food borne illness by consumption patterns?

Project Report/Summary of Results

We matched the consumption patterns of food by market area using Nielsen Homescan Data with non-outbreak incidence data for two pathogens using FoodNet data. We found that most of the explanatory power for food borne disease incidence was the place and time of the cases. While there was some association between food consumption and disease incidence, the vast majority of the explanatory power must lie in things other than consumption patterns, for instance, in contamination.

Specific Objectives of the Project

1. Can we explain food borne illness by consumption patterns?
2. What is the premium for rent or purchase price for energy efficient buildings?

Project Report/Summary of Results

This research exploits exogenous variation in mandatory energy code implementations as a result of the 1992 Energy Policy Act to estimate the energy efficiency premium in office buildings. A more stringent code leads to rent and price premiums of approximately 3% and 12%, respectively. Significant heterogeneity in the rent premium is observed based on who pays the utility bills, as would be expected absent asymmetric information about energy conservation characteristics among real estate market participants. The results cast doubt that asymmetric information between office building owners and prospectivebuyers or tenants mitigates the returns to energy efficiency.

Specific Objectives of the Project

The objective is to estimate the demand for categories of goods, including agricultural goods and energy goods, by California consumers.

Project Report/Summary of Results

A methodology that accounts for the time series nature of demand estimates was derived, although attempts within that methodology to account for second order bias were not successful. Demand systems were estimated from CEX data, using each individual in the data as a separate set of observations. The systems do account for the fixed effects of these individuals and the fixed effects do make a significant difference in the estimates.