Toward More General Hedonic Estimation: Clarifying the Roles of Alternative Experimental Designs with an Application to a Housing Attribute

Posted: 10 Nov 2017

See all articles by Michael D. Eriksen

Michael D. Eriksen

University of Cincinnati - Department of Finance - Real Estate

Thomas Kniesner

Claremont Graduate University

Ryan S. Sullivan

Syracuse University - Department of Economics

Chris Rohlfs

Morgan Stanley

Date Written: March 1, 2016

Abstract

Traditional hedonic estimation approaches are known to be biased when exogenous shocks affect multiple product attributes, the market for the product's complements and substitutes, and aggregate quantity produced. Our research develops a more general hedonic model to recover the marginal willingness to pay for an attribute in the presence of such known hazards to identification based on randomized experiments. Three experimental approaches are introduced on how to estimate attribute demand that address known biases, have transparent identification assumptions, and are feasible to implement. We apply one of the estimators developed to measure the marginal value placed by householders on subsidized carbon monoxide detectors.

Keywords: Hedonic, Identification, Field Experiment, Marginal Willingness to Pay, Heterogeneous Goods, Endogenous Attributes

JEL Classification: D12, C35, C31, D61, C9

Suggested Citation

Eriksen, Michael D. and Kniesner, Thomas and Sullivan, Ryan S. and Rohlfs, Chris, Toward More General Hedonic Estimation: Clarifying the Roles of Alternative Experimental Designs with an Application to a Housing Attribute (March 1, 2016). Regional Science and Urban Economics, Vol. 57, No. Pages 54-62, March 2016. Available at SSRN: https://ssrn.com/abstract=3067629

Michael D. Eriksen (Contact Author)

University of Cincinnati - Department of Finance - Real Estate ( email )

College of Business Administration
Cincinnati, OH 45221
United States

Thomas Kniesner

Claremont Graduate University ( email )

150 E. Tenth Street
Claremont, CA 91711
United States

Ryan S. Sullivan

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States

Chris Rohlfs

Morgan Stanley ( email )

1585 Broadway
New York, NY 10036
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
81
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information