The hedonic approach involves determining the characteristics of a good or service that have a market price. Simultaneously, estimates of those prices are made using regression analysis. Both delivered and FOB mine prices are examined in regional U.S. markets. The steam coal contract terms examined include Btu, sulfur, and ash content; transportation cost, average annual tons delivered, start year of the contract, length of contract, buyer controlling interest in the mining operation, coal mine locations, and the individual buyers. Data for about eighty-five percent of all 1978 steam coal deliveries is utilized. The major findings were that coal price structure varies substantially across markets, from year to year, and for delivered prices and FOB mine prices. Btu is usually, but not always, the most important characteristic in explaining coal price variations. Length of contract is occasionally more important. Transportation cost and sulfur content are usually of high importance. Some buyers have a substantial impact on price because of market imperfections and poor buying practices. The regression results were robust. / Master of Arts

Dramatic changes in U.S. coal prices during the 1970's and 1980's have brought into question the ability of currently available forecasting models to predict non-renewable resource prices. This thesis compares two types of forecasting models used to predict non-renewable resource prices. Each model is assessed based upon theoretical and practical considerations. The models evaluated are a conventional time series model and an optimization model. The thesis finds each model to have inherent advantages and disadvantages within the areas of comparison. The conventional time series model is assessed as relatively simple to develop and easy to use for rough approximations of future prices, but lacking in its reflection of the current body of economic theory on non-renewable resources. The optimization model is evaluated as more thoroughly embracing some of the advances made in the theory, but requiring an extensive commitment of resources for its development. / Master of Arts

M.Phil. / Coal is today providing more than seventy-five percent of South Africa's energy requirements and will, to a large extent, remain so in the future. It is thus important to evaluate the adequacy of the country's available coal resources against expected future demand. The main objective of this study, which was done under the supervision of Prof. D. J. Kotze, was therefore to analyse the specific consumption of coal in the various consumption sectors in order to establish historical trends. The specific comsumption of coal is defined as the amount of coal used to produce a unit of final product. The factors attributing to these observed trends were determined and their future role evaluated in order to establish whether it was possible to extrapolate historical trends into the future. By means of curve fitting to the observed data and extrapolation it was possible to obtain future values of specific coal consumption for each of the sectors. These values, together with the production output forecasts for the various sectors were then used to calculate the total coal requirements for three reference years, namely, 1990, 1995 and 2000. The role of coal prices in explaining trends in specific coal consumption of various sectors was also analised separately. Information to conduct the study was obtained mainly from the various coal producers' associations as well as from individual producers and other organizations such as Escom, Sasol and Iscor, the Department of Hineral and Energy Affairs and the Hinerals Bureau. In some instances private firms and producers' associations were also consulted as well as a wide variety of literature on the subject. The principal finding of the study was that coal was substituted or was still being substituted by electricity in most final applications because of the convenience of use. Coal, however, still plays and probably will continue to play an important role in future in basic industries such as the metallurgical industry. Coal prices have not up to now played a very important role in the overall specific consumption of coal which can probably be attributed to the relatively low prices of coal on the inland market. It was also found that it was not desirable to do away with the present system of price control entirely as a certain measure of control was still necessary to safeguard the usuage of coal in certain applications for which there were no other substitutes. It was further concluded that South Africa does not have the vast quantities of coal commonly thought and that measures have to be taken in order to ensure that the country's coal resources are conserved and that optimum use is made of available resources.

This thesis investigates to what extent coal prices differed globally during the nineteenth and twentieth centuries, and whether those differences mattered for economic development. The backbone of my empirical investigation is a new dataset of annual coal prices spanning the years 1840 to 1960 for, on average, over 30 globally distributed ports. This dataset is complemented by pithead prices for all major coal-producing countries. My analysis includes all major steam coals and I eliminate quality differences by accounting for differences in their carbon content. I construct my argument by examining two major drivers of differences in coal prices. First, I examine trade costs for Welsh steam coals, which were shipped to most regions of the world. Secondly, I estimate the effect of the spread of coal mining, for example to India, on local coal prices by initating competition between coals from different origins. While trade costs declined most during the late nineteenth century, the spread of coal mining led to continued price convergence in the interwar period. And yet, global coal price differences remained significant, especially between producing and importing countries. Arguably, my most interesting finding is on the effect of those coal price differences. More specifically, I calculate the ratio of coal prices to wages, and explore whether countries where this ratio was closer to the British ratio were in the best position to use the most advanced steam technology. My econometric results indeed show that countries with a low coal price/wage ratio experienced higher manufacturing output growth during the period 1870 to 1940. This finding of my thesis highlights one potential way in which different levels of coal prices may have contributed to varying degrees of technology adoption between countries and ultimately economic growth.