A Theory-Based Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes : The Price of Pollution
Patrick Bajari, Jane Cooley, Kyoo il Kim, Christopher Timmins
We propose a new strategy for a pervasive problem in the hedonics literature--recovering hedonic prices in the presence of time-varying correlated unobservables. Our approach relies on an assumption about homebuyer rationality, under which prior sales prices can be used to control for time-varying unobservable attributes of the house or neighborhood. Using housing transactions data from California's Bay Area between 1990 and 2006, we apply our estimator to recover marginal willingness to pay for reductions in three of the EPA's "criteria" air pollutants. Our findings suggest that ignoring bias from time-varying correlated unobservables considerably understates the benefits of a pollution reduction policy
Year of publication: |
February 2010
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Authors: | Bajari, Patrick |
Other Persons: | Timmins, Christopher (contributor) ; Cooley, Jane (contributor) ; Kim, Kyoo il (contributor) |
Institutions: | National Bureau of Economic Research (contributor) |
Publisher: |
Cambridge, Mass : National Bureau of Economic Research |
Subject: | Hedonischer Preisindex | Hedonic price index | Immobilienpreis | Real estate price | Umweltschutzinvestition | Environmental investment | Zahlungsbereitschaftsanalyse | Willingness to pay | Preistheorie | Price theory |
Saved in:
freely available
Extent: | 1 Online-Ressource |
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Series: | NBER working paper series ; no. w15724 |
Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Mode of access: World Wide Web System requirements: Adobe [Acrobat] Reader required for PDF files Hardcopy version available to institutional subscribers. |
Other identifiers: | 10.3386/w15724 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012462927