Are commodity prices mean reverting or do they follow a random walk? As traditional unit root tests lack power, this article proposes using the ability to hedge option contracts as a measure of the most appropriate stochastic process. A misspecified price process will, quite naturally, result in...

Stated preference (SP) surveys attempt to obtain monetary values for non-market goods that reflect individuals’ “true” preferences. Numerous empirical studies suggest that monetary values from SP studies are sensitive to survey design and so may not reflect respondents’ true preferences....