Determination of Japanese buyer valuation of metallurgical coal characteristics by hedonic modeling
Considerable efforts have been devoted by econometric researchers to understanding Japanese steel mill (JSM) metallurgical coal valuation policies, and whether such policies disadvantage coal exporters. Much of this research has employed the hedonic regression modeling technique of Rosen [J. Polit. Econ. 2 (1974) 34] and examines the significance of coal quality in establishing market price. This article discusses shortcomings in some such modeling studies, and presents results of additional hedonic modeling to buttress findings of previous work suggesting that cross-cultural bargaining factors rather than coal quality explain lower prices for Australian coals in Japanese market settlements. Policy changes that might be effective in ameliorating bilateral market distortions arising from oligopsony characteristics exhibited in JSM contract settlements are then explored.