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Pricing Approach (pricing + approach)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	60%

Selected Abstracts

Impact of Agriculture on Rural Tourism: A Hedonic Pricing Approach

JOURNAL OF AGRICULTURAL ECONOMICS, Issue 1 2005
Isabel Vanslembrouck
The increased awareness of farmers' role in the maintenance of rural landscapes may contribute to a reassessment of the place of agriculture in society. In this paper, we look at how this role, in relation to landscape, is valued by rural tourists or, in other words, whether it is a response to a societal demand, as is argued by defenders of multifunctional agriculture. The results from a hedonic pricing analysis indicate that landscape features associated with agricultural activities (such as meadows and grazing cattle) positively influence the demand for rural tourism and have a positive impact on the price tourists are willing to pay for rural accommodation. This is also illustrated by the adverse impact of perceived negative externalities from agricultural production (such as intensive maize cultivation) on this price. [source]

A new transmission pricing approach for the electricity cross-border trade in the ASEAN Power Grid

EUROPEAN TRANSACTIONS ON ELECTRICAL POWER, Issue 2 2007
C. Adsoongnoen
Abstract The electricity cross-border trade is presently introduced among the member countries of the Association of South East Asian Nations (ASEAN). The ASEAN Power Grid (APG) is a plan to interconnect transmission networks among the ASEAN countries to optimize the use of energy resources; to operate the power network in an efficient, economical, and reliable manner; and to provide a close relation among the member countries by electric power interconnection. Transmission pricing is one of the controversial tasks to achieve the APG objectives. In this paper, a transmission pricing method for the electricity cross-border trade based on a combination of postage stamp method and sensitivity indices is proposed. The postage stamp pricing is a uniform tariff expected to recover the project investments, and the operation and maintenance costs. With the combination of the postage stamp method and sensitivity indices, the proposed pricing method sends proper incentive signals to power traders, which are based on system usage and congestion management. To demonstrate its effectiveness, the proposed method is applied to a 12-bus test system. The nodal tariffs at the particular injecting points, payments of the users, and revenues of transmission owners are computed. The simulation results indicate that the proposed method ensures a recovery of the investment costs and the concurrent costs of operation and maintenance in an efficient, fair, and simple manner. Copyright © 2006 John Wiley & Sons, Ltd. [source]

Implied trees in illiquid markets: A Choquet pricing approach

INTERNATIONAL JOURNAL OF INTELLIGENT SYSTEMS, Issue 6 2002
Silvia Muzzioli
Implied trees are necessary to implement the risk neutral valuation approach, and standard methodologies for their derivation are based on the validity of the put call parity. However, in illiquid markets the put call parity fails to hold, and the uniqueness of the artificial probabilities leaves room for an interval. The contribution of this article is twofold. First we propose a methodology for the derivation of implied trees in illiquid markets. Such a methodology, by contrast with standard ones, takes into account the information stemming both from call and put prices. Second, we set up a framework for pricing derivatives written on an underlying asset traded on an illiquid market. To this end we have extended the Choquet integral definition to account for interval payoffs of the underlying asset. The price interval we obtain may be interpreted as a bid-ask price quoted by the intermediary issuing the derivative security. © 2002 Wiley Periodicals, Inc. [source]

The accuracy and efficiency of alternative option pricing approaches relative to a log-transformed trinomial model

THE JOURNAL OF FUTURES MARKETS, Issue 6 2002
Hsuan-Chi Chen
This article presents a log-transformed trinomial approach to option pricing and finds that various numerical procedures in the option pricing literature are embedded in this approach with choices of different parameters. The unified view also facilitates comparisons of computational efficiency among numerous lattice approaches and explicit finite difference methods. We use the root-mean-squared relative error and the minimum convergence step to evaluate the accuracy and efficiency for alternative option pricing approaches. The numerical results show that the equal-probability trinomial specification of He (12) and Tian (25) and the sharpened trinomial specification of Omberg (21) outperform other lattice approaches and explicit finite difference methods. © 2002 Wiley Periodicals, Inc. Jrl Fut Mark 22:557,577, 2002 [source]