A hedonic price function, relating the price of Australian wine to its attributes, is estimated. Six attribute groups are found to be statistically important in explaining deviations from average wine prices, i.e., quality, cellaring potential, grape variety/style, grape region, grape vintage and producer size. Various interaction terms between these variables and the impact of the year of marketing are also modelled. The consequent marketing implications for producers and consumers are discussed.

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1467-8489.1994.tb00721.x

A Hedonic Price Function for Australian Premium Table Wine

Government agencies and water managers have showed an increasing interest for tradeable water entitlements (TWE) as a tool to alleviate the influence of raising water prices and to facilitate a reallocation of water resources to more efficient and sustainable uses from economic, social, and environmental perspectives. An understanding of how the water market works and which factors determine water right prices has become important to establish whether TWE policies facilitate this process. This research shows that the objectives largely have been achieved and that the more efficient irrigators are willing to pay a higher price for water, whereas the least efficient farmers are willing to sell at a lower price, showing that the buyers with high value of marginal product are willing to pay a price in excess of the value of the income generated by the sellers with low value of marginal product. Within the present legislative framework TWE does not, however, always direct water to the most sustainable users in an equitable manner.

https://agupubs.onlinelibrary.wiley.com/doi/pdf/10.1029/97WR03470

Factors affecting water prices in a rural water market: A South Australian experience

Australian attempts to value the environment began at least 40 years ago. Since then, environmental protection and natural resource management have become major national issues. But have the methods of valuation kept pace with the importance of the issues that they are meant to resolve? Can environmental and resource values actually be measured? This paper chronicles, reviews, and assesses the valuations of 40 years and more than 100 Australian authors.

A Review of Environmental Valuation in Australia

Water is vital for life and plays an essential role for economic development of countries. To address water scarcity issues, better pricing has been recognized as an important tool. In this paper several empirical studies which highlight water pricing theories and related models have been reviewed. These theories explain different aspect of water pricing that can be used as a means to improve water use efficiency. Analysis of partial equilibrium can be viewed as effects of a policy on a specific sector like agriculture, but an analysis of general equilibrium often involves steady-state paths which is in fact a macro-level approach. A comparison of first best pricing with second best pricing models shows that the latter are possible when transaction costs are included. In the absence of storage capacities limits and direct costs of water, development decision studies find that the price of water held in storage must rise at the rate of interest and that the effect of discounting is to cause a cycle in the water price. Finally, recent evidence suggests that the short-run efficiency of marginal cost pricing can be extended to account for long-run fixed cost considerations.

	 

	Key words: Water pricing, marginal value product pricing, partial equilibrium,general equilibrium, marginal cost pricing, average cost pricing.

Review of water pricing theories and related models

Improving quality is a major goal in the global seafood market due to increasing consciousness among buyers, who are becoming "quality consumers" rather than "quantity consumers." This paper uses the hedonic approach to determine the marketable characteristics of prawn and shrimp in a domestic market that prioritizes export of quality products to a more lucrative market. Using price and attribute data for prawn and shrimp purchased from the Philippine domestic market, we estimate a log-linear hedonic price model with combined continuous and dummy explanatory variables. The estimation results show significant implicit prices of attributes, such as: tail length, freshness, product form, species, color, size, ease of preparation, discoloration, protein, and carbohydrate content. Longer tails and banana species are highly valued. Peeling and breading to ease preparation obtain a high premium. Freezing, although commonly practiced, receives the highest discount among forms of preservation. As the characteristi...

Implicit prices of prawn and shrimp attributes in the Philippine domestic market

During the 1950s and 1960s pipelines were built to provide water to many farms in the central wheatbelt of Western Australia using public funds. The resulting network has become known as the Comprehensive Water Supply Scheme. The expansion of the Scheme is currently under consideration. An ex ante cost benefit analysis of the proposed expansion is undertaken. An earlier analysis which focused on the benefits of the reduced necessity to cart water was rejected by farmer groups because of the inability of the analysis to properly account for domestic benefits and risk reduction. To overcome these criticisms a hedonic model of farm land values is formulated in which the independent variables are the characteristics of a property, including whether or not the property is connected to the Scheme. The implicit marginal price (or value) of Scheme connection is then derived. An advantage of this technique is that it estimates the value that the farmers allocate to Scheme water in the market place. The conclusion is that the benefits of Scheme water are considerably less than the costs.

/pdf/hedonic-pricing-for-a-cost-benefit-analysis-of-a-public-2e8honp48h.pdf

J. Lloyd-Smith

Papers

Hedonic pricing for a cost benefit analysis of a public water supply scheme