Contract Parameters' Impacts on Coal Prices

Ian Lange

No 2008-26, Stirling Economics Discussion Papers from University of Stirling, Division of Economics

Abstract: The use of long-term contracts in the procurement of coal for electricity generation is common. The data that is observed from contracts and their transactions are from different levels of the pricing process. Contracts contain the parameters by which all future deliveries are structured, specifying the length of the agreement and acceptable coal attributes. Based on these parameters, a price is later determined for successive coal deliveries and the transaction occurs. This data structure fits well into multi-level models, where each level of the process is empirically estimated. A random intercept model is estimated where the first level is a hedonic model of coal prices. The contract that initiates the delivery is used to connect the two levels of the model. In the second level, contract coefficients from the first level are regressed on contract parameters to determine their impact on how coal is priced. Results find that many contract parameters are statistically significant in the price of coa l.

Keywords: Tradable Permits; Contracts; Coal; Sulfur Dioxide (search for similar items in EconPapers)
Date: 2008-11
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/1893/567

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:stl:stledp:2008-26

Access Statistics for this paper

More papers in Stirling Economics Discussion Papers from University of Stirling, Division of Economics Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA. Contact information at EDIRC.
Bibliographic data for series maintained by Liam Delaney ( this e-mail address is bad, please contact ).