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Estimating demand schedules in hedonic analysis: The case of urban parks

Author

Listed:
  • Toke Emil Panduro

    (Department of Food and Resource Economics, University of Copenhagen)

  • Cathrine Ulla Jensen

    (Department of Food and Resource Economics, University of Copenhagen)

  • Thomas Hedemark Lundhede

    (Department of Food and Resource Economics, University of Copenhagen
    Center for Macroecology, Evolution and Climate, University of Copenhagen)

  • Kathrine von Graevenitz

    (Department of Environmental and Resource Economics, Centre for European Economic Research (ZEW))

  • Bo Jellesmark Thorsen

    (Department of Food and Resource Economics, University of Copenhagen
    Center for Macroecology, Evolution and Climate, University of Copenhagen)

Abstract

The hedonic pricing method has been used extensively to obtain implicit prices for availability of urban green space, but few hedonic studies have obtained households’ preference parameters. We estimate willingness to pay functions for park availability in Copenhagen using an approach that places identifying restrictions on the utility function. We do this for two different measures of park availability. We apply our results to a policy scenario and show how estimates of aggregate welfare changes are highly sensitive to the measure of park availability applied. Thus, the approach in this study applies an alternative path for estimation of demand schedules for public goods using hedonic data. The findings also stress the importance of paying attention to how public goods are defined when undertaking welfare economic policy analyses.

Suggested Citation

  • Toke Emil Panduro & Cathrine Ulla Jensen & Thomas Hedemark Lundhede & Kathrine von Graevenitz & Bo Jellesmark Thorsen, 2016. "Estimating demand schedules in hedonic analysis: The case of urban parks," IFRO Working Paper 2016/06, University of Copenhagen, Department of Food and Resource Economics.
    • Handle: RePEc:foi:wpaper:2016_06
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    References listed on IDEAS

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    Cited by:

    1. Cathrine Ulla Jensen & Toke Emil Panduro & Thomas Hedemark Lundhede & Kathrine von Graevenitz & Bo Jellesmark Thorsen, 2016. "Robin Hood in reverse? Assessing distributional effects of green space policy using a second-stage hedonic house price model," IFRO Working Paper 2016/07, University of Copenhagen, Department of Food and Resource Economics.

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    More about this item

    Keywords

    hedonic house price model; green space; preference heterogeneity; identification;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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