Identification and Estimation of Hedonic Models

Posted: 26 Jan 2004

See all articles by Ivar Ekeland

Ivar Ekeland

University of British Columbia (UBC) - Faculty of Education; Université Paris Dauphine - CEREMADE

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Lars Nesheim

University College London; Institute for Fiscal Studies (IFS)

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Abstract

This paper considers the identification and estimation of hedonic models. We establish that in an additive version of the hedonic model, technology and preferences are generically nonparametrically identified from data on demand and supply in a single hedonic market. The empirical literature that claims that hedonic models estimated on data from a single market are fundamentally underidentified is based on arbitrary linearizations that do not use all the information in the model. The exact economic model that justifies linear approximations is unappealing. Nonlinearities are generic features of equilibrium in hedonic models and a fundamental and economically motivated source of identification.

Suggested Citation

Ekeland, Ivar and Heckman, James J. and Nesheim, Lars, Identification and Estimation of Hedonic Models. Journal of Political Economy, Vol. 112, No. 1, pp. S60-S109, February 2004. Available at SSRN: https://ssrn.com/abstract=489688

Ivar Ekeland

University of British Columbia (UBC) - Faculty of Education ( email )

Université Paris Dauphine - CEREMADE ( email )

Place du Marechal de Lattre de Tassigny
Paris Cedex 16, 75775
France

James J. Heckman (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States
773-702-0634 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

American Bar Foundation

750 N. Lake Shore Drive
Chicago, IL 60611
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Lars Nesheim

University College London ( email )

Gower Street
London
United Kingdom

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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