Semi-Parametric Hedonic Models, and Empirical Comparison (2008#10)
Hedonic models have been widely used in the literature for valuation of non- market goods such as air quality. While the inclusion of air quality variables in hedonic models is common in applied work, there is not theoretical basis for defining the functional relation between air quality and house prices. Estimation of semiparametric models that allow the data to determine the functional form may provide more insight on the real relationships suggested by the data rather than imposing the constraints of fully parametric models. Using an instrumental variable estimator, I explore the advantages of using semiparametric models in the estimation of spatial hedonic models by comparing the economic estimates from a parametric spatial lag model with those of a semiparametric specification, where the environmental variable is introduced nonparametrically.
spatial econometrics, hedonic models, semi-parametric, endogeneity, air quality valuation, real estate markets.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.