Data requirements of hedonic models in determining the impact of infrastructure charges on new housing costs

The use of hedonic models to estimate the effects of various factors on house prices is well established. This paper examines a number of international hedonic house price models that seek to quantify the effect of infrastructure charges on new house prices. This work is an important factor in the housing affordability debate, with many governments in high growth areas having user-pays infrastructure charging policies operating in tandem with housing affordability objectives, with no empirical evidence on the impact of one on the other. This research finds there is little consistency between existing models and the data sets utilised. Specification appears dependent upon data availability rather than sound theoretical grounding. This may lead to a lack of external validity with model specification dependent upon data availability rather than sound theoretical grounding.

Essays on Machine Learning and Hedonic Models

Thesis (Ph.D.)--University of Washington, 2016-08

The wine hedonic price models in the "Old and New World": : state of the art

The basic hedonic hypothesis is that goods are valued for their utility-bearing characteristics and not for the good itself. Each attribute can be evaluated by consumers when making a purchasing decision and an implicit price can be identified for each of them. Thus, the observed price of a certain good can be analyzed as the sum of the implicit prices paid for each quality attribute. Literature has reported hedonic models estimates in the case of wines, which are excellent examples of differentiated goods worldwide.The impact of different wine attributes (intrinsic or extrinsic) on consumers’ willingness to pay has been analyzed with dissimilar results. Wines coming from "New World" producers seem to be appreciated for different attributes than wines produced in the "Old World". Moreover, "Old and New World" consumers seem to value differently the wine’s characteristics. To our knowledge, no cross country analysis has been done dealing with "New World" wines in "Old World" countries, leaving an important gap in understanding underlying attributes influencing buying decisions.

Migration and hedonic valuation: The case of air quality

Conventional hedonic techniques for estimating the value of local amenities rely on the assumption that households move freely among locations. We show that when moving is costly, the variation in housing prices and wages across locations may no longer reflect the value of differences in local amenities. We develop an alternative discrete-choice approach that models the household location decision directly, and we apply it to the case of air quality in US metro areas in 1990 and 2000. Because air pollution is likely to be correlated with unobservable local characteristics such as economic activity, we instrument for air quality using the contribution of distant sources to local pollution-excluding emissions from local sources, which are most likely to be correlated with local conditions. Our model yields an estimated elasticity of willingness to pay with respect to air quality of 0.34-0.42. These estimates imply that the median household would pay $149-$185 (in constant 1982-1984 dollars) for a one-unit reduction in average ambient concentrations of particulate matter. These estimates are three times greater than the marginal willingness to pay estimated by a conventional hedonic model using the same data. Our results are robust to a range of covariates, instrumenting strategies, and functional form assumptions. The findings also confirm the importance of instrumenting for local air pollution. © 2009 Elsevier Inc. All rights reserved.

Determinants of WTP for Prosecco wine: A latent class regression with attitudinal responses

Purpose – Under investigation is Prosecco wine, a sparkling white wine from North-East Italy.
Information collection on consumer perceptions is particularly relevant when developing market
strategies for wine, especially so when local production and certification of origin play an important
role in the wine market of a given district, as in the case at hand. Investigating and characterizing the
structure of preference heterogeneity become crucial steps in every successful marketing strategy. The
purpose of this paper is to investigate the sources of systematic differences in consumer preferences.
Design/methodology/approach – The paper explores the effect of inclusion of answers to
attitudinal questions in a latent class regression model of stated willingness to pay (WTP) for this
specialty wine. These additional variables were included in the membership equations to investigate
whether they could be of help in the identification of latent classes. The individual specific WTPs from
the sampled respondents were then derived from the best fitting model and examined for consistency.
Findings – The use of answers to attitudinal question in the latent class regression model is found to
improve model fit, thereby helping in the identification of latent classes. The best performing model
obtained makes use of both attitudinal scores and socio-economic covariates identifying five latent
classes. A reasonable pattern of differences in WTP for Prosecco between CDO and TGI types were
derived from this model.
Originality/value – The approach appears informative and promising: attitudes emerge as
important ancillary indicators of taste differences for specialty wines. This might be of interest per se
and of practical use in market segmentation. If future research shows that these variables can be of use
in other contexts, it is quite possible that more attitudinal questions will be routinely incorporated in
structural latent class hedonic models.

Spatial housing economics: a survey

This introduction to the Virtual Special Issue surveys the development of spatial housing economics from its roots in neo-classical theory, through more recent developments in social interactions modelling, and touching on the role of institutions, path dependence and economic history. The survey also points to some of the more promising future directions for the subject that are beginning to appear in the literature. The survey covers elements hedonic models, spatial econometrics, neighbourhood models, housing market areas, housing supply, models of segregation, migration, housing tenure, sub-national house price modelling including the so-called ripple effect, and agent-based models. Possible future directions are set in the context of a selection of recent papers that have appeared in Urban Studies. Nevertheless, there are still important gaps in the literature that merit further attention, arising at least partly from emerging policy problems. These include more research on housing and biodiversity, the relationship between housing and civil unrest, the effects of changing age distributions - notably housing for the elderly - and the impact of different international institutional structures. Methodologically, developments in Big Data provide an exciting framework for future work.

Analysis of house prices to assess economic impacts of new public transport infrastructure: Madrid metro line 12.

Transportation infrastructure is known to affect the value of real estate property by virtue of changes in accessibility. The impact of transportation facilities is highly localized as well, and it is possible that spillover effects result from the capitalization of accessibility. The objective of this study was to review the theoretical background related to spatial hedonic models and the opportunities that they provided to evaluate the effect of new transportation infrastructure. An empirical case study is presented: the Madrid Metro Line 12, known as Metrosur, in the region of Madrid, Spain. The effect of proximity to metro stations on housing prices was evaluated. The analysis took into account a host of variables, including structure, location, and neighborhood and made use of three modeling approaches: linear regression estimation with ordinary least squares, spatial error, and spatial lag. The results indicated that better accessibility to Metrosur stations had a positive impact on real estate values and that the effect was marked in cases in which a house was for sale. The results also showed the presence of submarkets, which were well defined by geographic boundaries, and transport fares, which implied that the economic benefits differed across municipalities.

Applying hedonic property models in the planning and evaluation of shoreline management

According to the Millennium Ecosystem Assessment’s chapter “Coastal Systems” (Agardy and Alder 2005), 40% of the world population falls within 100 km of the coast. Agardy and Alder report that population densities in coastal regions are three times those of inland regions and demographic forecasts suggest a continued rise in coastal populations. These high population levels can be partially traced to the abundance of ecosystem services provided in the coastal zone. While populations benefit from an abundance of services, population pressure also degrades existing services and leads to increased susceptibility of property and human life to natural hazards. In the face of these challenges, environmental administrators on the coast must pursue agendas which reflect the difficult balance between private and public interests. These decisions include maintaining economic prosperity and personal freedoms, protecting or enhancing the existing flow of ecosystem services to society, and mitigating potential losses from natural hazards. (PDF contains 5 pages)

Two Levels of Motivation and Two Types of Well-Being: Relations Between General and Goal-Specific Motivations, and Eudaimonic and Hedonic Well-Being

In this thesis I assess the individual and joint predictive associations and effects between multiple motivation and well-being concepts. In particular, three pairs of motivation concepts (intrinsic/extrinsic, approach/avoidance, and eudaimonic/hedonic) are assessed simultaneously at two levels of analysis (disposition and goal) and examined in relation to two types of well-being (eudaimonic and hedonic) in two studies, one correlational and the other experimental. Study 1: Using a correlational design, participants (N = 325, M age = 19.10, 87% female) completed self-report measures assessing six motivation and two well-being concepts. Exploratory factor analyses were used to assess patterns of associations among the motivational constructs. Results indicated that constructs displaying conceptual and empirical similarities co-occur, particularly, intrinsic, approach and eudaimonic motivation. Regression models were used to assess predictive relations between the motivational constructs and well-being. Both types of well-being were predicted by approach and avoidance dispositions, and hedonic goals. Additionally, eudaimonic well-being was uniquely predicted by eudaimonic dispositions and goals, and intrinsic dispositions; and hedonic well-being was uniquely predicted by extrinsic dispositions and approach goals. The patterns of associations among motivational constructs, and similarities and differences in the ways they predict each type of well-being, are discussed. Study 2: Using an experimental design, participants (N = 447, M age = 19.30, 88% female) were randomly assigned to one of eight experimental conditions, each involving a manipulation aimed at priming combinations of the three pairs of motivational constructs at the goal level. Participants then completed measures of both types of well-being. ANOVAs were used to assess the main effects and interactions of experimental condition for each of the three pairs of motivational constructs on well-being. Main effects of experimental conditions were non-significant. However, results indicated that focus on each of the three pairs of motivational constructs predicted well-being and that the manipulation impacted well-being indirectly, through experimentally-shifted motivational focus. Few interactions emerged. Implications for future experimental research and the conceptual integration of motivation and well-being constructs are discussed. In conclusion, Studies 1 and 2 inform the motivation and well-being fields in novel ways and provide preliminary steps towards studying these fields from an integrated and comprehensive motivational framework.

HEDONIC ANALYSIS OF CELL PHONES SOLD WITH POST-PAID SERVICE PLANS IN BRAZIL

The aim of this paper is to analyze the determining factors for the pricing of handsets sold with service plans, using the hedonic price method. This was undertaken by building a database comprising 48 handset models, under nine different service plans, over a period of 53 weeks in 2008, and resulted in 27 different attributes and a total number of nearly 300,000 data registers. The results suggest that the value of monthly subscriptions and calling minutes are important to explain the prices of handsets. Furthermore, both the physical volume and number of megapixels of a camera had an effect on the prices. The bigger the handset, the cheaper it becomes, and the more megapixels a camera phone has, the more expensive it becomes. Additionally, it was found that in 2008 Brazilian phone companies were subsidizing enabled data connection handsets.

Hedonic analysis of cell phones sold with post-paid service plans in Brazil

The aim of this paper is to analyze the determining factors for the pricing of handsets sold with service plans, using the hedonic price method. This was undertaken by building a database comprising 48 handset models, under nine different service plans, over a period of 53 weeks in 2008, and resulted in 27 different attributes and a total number of nearly 300,000 data registers. The results suggest that the value of monthly subscriptions and calling minutes are important to explain the prices of handsets. Furthermore, both the physical volume and number of megapixels of a camera had an effect on the prices. The bigger the handset, the cheaper it becomes, and the more megapixels a camera phone has, the more expensive it becomes. Additionally, it was found that in 2008 Brazilian phone companies were subsidizing enabled data connection handsets.