The Hedonic Pricing Method Professor A. Markandya Department of Economics and International Development University of Bath email@example.com tel. +44 1225 386954 Environmental Economics 2 March 2006 Hedonic pricing method Revealed preferences No questionnaire!
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
The Hedonic Pricing Method
Professor A. Markandya
Department of Economics and International Development University of Bath
tel. +44 1225 386954
Environmental Economics 2
That is, the marginal rate of substitution between each characteristic n and the consumption of other goods is equal to the ‘price’ (coefficient) of n and the price of c.
is the hedonic price function
p(s,n): c = m – p(s,n)
Hedonic price function
Where w=wage rage, p=fatal risk in the workplace faced by worker i, q=risk of non-fatal injury, WC = worker comp., and the x’s are other worker and job characteristics (age, experience, etc.)
House price falls by 245US$ if pollution is present
Ridker and Henning estimate the environmental damage of air pollution in St. Louis to be 82 million dollars => need to compare this estimate with the cost of a public program to clean pollution
Database for Case Study
IMPLIP = (0.16871 / BROADL) PRICEX
IMPLIP = EXP( 6.34) REDDHOU 0.76 COMPON 0.11 BROADL -0.85