Identification and Estimation of Hedonic Models

By Ivar Ekeland, James J. Heckman, L. Nesheim. Journal of Political Economy, 2004

698 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/f632ca07749487346e0d9770ceaa0c04ee7ba235

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Citations in the corpus

Are Travelers Willing to Pay a Premium to Stay at a “Green” Hotel? Evidence from an Internal Meta-Analysis of Hedonic Price Premia (2010, neutral): “There are at least three reasons why an internal meta-analysis can be especially valuable in the context of a new application such as green lodging .”
Hedonic Pricing with Redevelopment Options: A New Approach to Estimating Depreciation Effects (2010, neutral): “…has spawned an immense literature aimed at estimating those attribute prices for a variety of goods or services such as the supply of labor, automobiles, art objects, municipal bonds and real estate (see for example, Ekeland et al., 2003; Arguea and Hsiao, 1993; Gunnelin and Soderberg, 2003).”
Quasi-Experiments and Hedonic Property Value Methods (2009, neutral): “bartik (1987), Epple (1987) and Ekeland et al. (2004) discuss ways of overcoming identification problems, but the socalled ‘second stage’ of the hedonic model remains difficult to implement in practice.”
Nonparametric identification and estimation of transformation models (2015, positive): “Our identification results are close in spirit to those obtained by Ridder (1990) and Ekeland, Heckman, and Nesheim (2004) who focus on exogenous regressors.”
The value of a statistical life (2009, positive): “One of two approaches can be followed to recover the preference parameters: i) impose a structure of non-linearity of the system (Ekeland et al., 2002, 2004), or ii) use multi market data where the HPFs differ between the markets (Brown and Rosen, 1982; Palmquist, 1991).”
Imperfect Competition, Compensating Differentials and Rent Sharing in the U.S. Labor Market (2019, neutral): “2018; Carlsson, Messina, and Skans (2016); Balke and Lamadon (2020); and Friedrich et al. (2019). A concern with this approach is that measures of firm productivity may reflect a number of factors. Some studies have therefore examined the pass-through of specific, observable changes. For example, Va”
A Dynamic Model of Demand for Houses and Neighborhoods (2016, neutral): “23See Epple and Sieg (1999), Ekeland, Heckman, and Nesheim (2004), Bajari and Kahn (2005), Ferreyra (2007), and Bayer, McMillan, and Rueben (2011) for several recent examples.”
Measuring the Returns to R&D: The Depreciation Problem (2005, neutral): “Ekeland, Heckman, and Nesheim (2003) discuss this issue and show that in the linear-quadratic model of consumer preferences and production with worker and firm heterogeneity, the linear hedonic model identifies consumer preferences (demand for labor) when workers are homogeneous and worker…”
Beyond implicit prices: recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model (2007, positive): “and use the non-linearity of the HPF to afford identification (as per Ekeland et al. 2004 )o r (2) introduce exogenous price variation into the data by collecting observations from a variety of property markets each characterised by unique and differing HPFs (as per Brown and Rosen 1982; Murray 19”
Modeling Spatial Dimensions of Housing Prices in Milwaukee, WI (2007, positive): “However, the full potential of the hedonic model remains to be exploited (Ekeland et al, 2004).”