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The suitability of hedonic models for cost-benefit analysis: Evidence from commuting flows

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  • Gjestland, Arnstein
  • McArthur, David Philip
  • Osland, Liv
  • Thorsen, Inge
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    Abstract

    We compare two estimates of benefits arising from the construction of new bridges in south-west Norway. One estimate comes from a hedonic property value model. Rather than follow an approach which is strictly theoretically correct, we adopt Rosen’s simple first-stage approach. To investigate and validate whether this simplified approach gives a reasonable estimate, we compare it to an estimate derived from a travel demand model. We find that a variant of an ex post hedonic house price model gives very similar estimates to the estimates from the travel demand model. This supports a hypothesis that the simplistic hedonic approach is reasonable.

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    Bibliographic Info

    Article provided by Elsevier in its journal Transportation Research Part A: Policy and Practice.

    Volume (Year): 61 (2014)
    Issue (Month): C ()
    Pages: 136-151

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    Handle: RePEc:eee:transa:v:61:y:2014:i:c:p:136-151

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    Related research

    Keywords: Road infrastructure; Benefit valuation; Time savings; Hedonic model; Method validation;

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