Reason and Rationality during Energy Crises

Daly, George; Mayor, Thomas H.

doi:10.1086/261134

Cited by 41 publications

(7 citation statements)

References 10 publications

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“…In addition, U.S. domestic income is eroded by the shift of income out of the U.S., the reductions in industrialized trading partners' GNPs and hence in U.S. exports, and (potentially) by government policies such as income tax "bracket creep" (Hickman, Huntington, and Sweeney, 1987:22, 30-31). 9 Daly and Mayor (1983) argue that consumers responded rationally to the two energy price shocks of the 1970s, in forming expectations of the future. (Source: Hickman, Huntington, and Sweeney [1987:45]) Only after the recession of 1982 did falling oil prices accompany resumed GDP growth.…”

Section: Energy and Stable Economic Growthmentioning

confidence: 99%

“…In most models, the mechanism for these effects entails reductions in money supply and higher interest rates, with a consequent dampening of investment, consumer durables purchases, real income, and overall consumption. In addition, U.S. domestic income is eroded by the shift of income out of the U.S., the reductions in industrialized trading partners' GNPs and hence in U.S. exports, and (potentially) by government policies such as income tax "bracket creep"(Hickman, Huntington, and Sweeney, 1987:22, 30-31).9 Daly and Mayor (1983) argue that consumers responded rationally to the two energy price shocks of the 1970s, in forming expectations of the future.FIG. 10.…”

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confidence: 99%

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Energy in the World Economy, 1950-1992

1997

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Trends in energy production, trade, and consumption during 1950-1992 are analyzed, using nine world regions to highlight both North-South energy trade and the regions' differing patterns of industrialization. Following price shocks in 1973 and 1979, and the price drop of the mid-1980s, the industrialized West adjusted its patterns of energy consumption and imports, and the Middle East changed its level of exports. These relationships suggest a cobweb-type model with an equilibrium price for Mideast oil around $30/barrel. This equilibrium could result in zero growth in energy consumption in the industrialized West but continued growth of GDP as energy efficiency increases. Energy prices that are "too high" reduce GDP growth in the short term-to the detriment of both energy importers and exporters-while prices that are "too low" lead in the long term to high dependency on Middle East oil exports, which, in turn, depends on an elusive and costly political stability in that region. The analysis highlights the central role of North-South energy trade in the world economy, and the close but changing relationship of energy with overall GDP growth.The harnessing of nonrenewable energy sources (primarily coal, oil, and gas) has been fundamental to the process of world industrialization over the past two centuries. In global North-South relations, patterns of energy production and consumption reflect the underlying physical-that is, nonmonetary-structure of the world economy. Energy is by far the largest category of trade in natural resources globally, and a critical element in North-South trade generally. Energy flows International Studies Quarterly (1997) 41, 241-266

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Section: Energy and Stable Economic Growthmentioning

confidence: 99%

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confidence: 99%

Energy in the World Economy, 1950-1992

1997

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“…Regretably, with only a little over a decade's annual data, we did not think it possible to carry out the sort of statistical analysis accomplished by Daly and Mayor (1983) with respect to used car prices, to discover the extent of the lags involved in the property market's response to changes in transport costs, and to what extent householders regard the changes as permanent or temporary. Clearly, the availability of the quarterly data which is now being published will allow future econometricians to examine this in greater detail.…”

Section: The Evidence --Spatial Changes In Dwelling Valuesmentioning

confidence: 99%

Transport Costs and Urban Property Values in the 1970s

Evans

Beed

1986

Urban Studies

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In this paper we use data on property values published annually for the 56 local government areas in the Melbourne metropolitan area to investigate the response of the property market to the oil price rises of the seventies. We show that property values appeared to have responded rapidly to the Australian petrol price increase of 1978, more accessible properties gaining in value relative to less accessible. The 1973 increase was not passed on to Australian consumers but the depression in manufacturing industry which started after it, also had an impact on the property market as values in areas where manufacturing workers rived fell in value relative to others.The economic study of urban property values can be said to have begun with the work of Brigham (1965) and Pendleton (1965). Their studies of the determinants of land and property values in Los Angeles and Washington DC were the initiators of a series of statistical studies, both by economists using so-called hedonic methods to calculate the determinants of property values and the costs of externalities such as pollution and noise, and by valuers refining the use of multiple regression analysis as a method of appraising the value of large numbers of properties for tax, and other, purposes.One aspect of the study of property values which has been virtually neglected has been the study of changes over time. The main reason for this is clear enough; the researchers have usually had to collect and process their own data. For example, among the British researchers; Richardson, Vipond and Furbey (1975) employed a team of part-time research assistants at the Register of Sassines in Edinburgh, Ball and Kirwan (1977) had to survey property owners using changes in the electoral register to identify recent moves, while Cubbin (1974) and Evans (1973) obtained data from individual Estate Agents on houses for sale in particular areas.Given the problems of collecting data, it is not surprising that few have attempted to maintain a data bank over a period of time, let alone a period long enough to investigate the determinants of changes in property values. A rare example of a city for which such studies have been carried out is Chicago, where the publication of Olcott's Land Values allowed Hoyt (1939), Mills (1969) and Yeates (1965) to study changes in land values in the long run over periods of up to a century. These studies showed that the land value gradient gradually became less steep over the period, presumably as a consequence of falling transport costs and rising transport speeds. These were investigations of changes in the long run, however, and so far as we are aware, the short run response of the land and property market to changes in the determinants of relative property values has never been examined.The aims of this paper are threefold. Firstly, to use the annual data available for the Melbourne property market to examine its short run response to the change in transport costs which occurred in the 1970s. Secondly, to show that the response to this change was gr...

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“…found to be correlated to preceding oil price hikes, and Daly and Mayor (5), where the market for used automobiles in the United States is found to be affected by the same oil price hikes of the Arab embargo of 1973 and the Iran revolution of 1979. While our initial intention in this paper was to analyze the effects on gasoline con sumption of the 1973 embargo, our data in dicated some interesting structural changes in the consumption time series coinciding with the events of 1979.…”

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confidence: 97%