Economics at your fingertips  

Are There Common Values in BC Timber Sales? A Tail-Index Nonparametric Test

Jonathan B. Hill () and Artyom Shneyerov ()
Additional contact information
Jonathan B. Hill: Dept. of Economics, University of North Carolina - Chapel Hill

No 9003, Working Papers from Concordia University, Department of Economics

Abstract: We develop a new nonparametric test of common values in first-price auctions and apply it to British Columbia (BC) Timber Sales. The test is based on the behavior of the CDF of bids near the reserve price. We show that the curvature of the CDF is drastically different under private values (PV) and common values (CV). We then show that the problem of discriminating between PV and CV is equivalent to estimating the lower tail index of the bid distribution. Our approach allows for unobserved auction heterogeneity of an arbitrary form, and in particular doesn't require the number of potential bidders to be observable. Drawing on the existing and recent literature on tail index estimation, we characterize the B. Hill (1975) tail index estimator for panels with stochastic dimension and a new semi-parametric estimator of the asymptotic variance for robust inference. For BC Timber Sales, we find overwhelming support for CV.

JEL-codes: D44 C14 (search for similar items in EconPapers)
Date: 2009-06-20
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (application/pdf)

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:

Access Statistics for this paper

More papers in Working Papers from Concordia University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Economics Department ().

Page updated 2019-11-16
Handle: RePEc:crd:wpaper:09003