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Simulation and Estimation of Hedonic Models

Author

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  • Heckman, James J.

    (University of Chicago)

  • Matzkin, Rosa

    (University of California, Los Angeles)

  • Nesheim, Lars

    (University College London)

Abstract

Making use of restrictions imposed by equilibrium, theoretical progress has been made on the nonparametric and semiparametric estimation and identification of scalar additive hedonic models (Ekeland, Heckman, and Nesheim, 2002) and scalar nonadditive hedonic models (Heckman, Matzkin, and Nesheim, 2002). However, little is known about the practical aspects of estimating such models or of the characteristics of equilibrium in such models. This paper presents computational and analytical results that fill some of these gaps. We simulate and estimate examples of equilibrium in the additive hedonic models and provide evidence on the performance of several estimation techniques. We also simulate examples of equilibria in nonadditive models and provide evidence on the performance of the nonadditive estimation techniques developed in Heckman, Matzkin, and Nesheim (2002).

Suggested Citation

  • Heckman, James J. & Matzkin, Rosa & Nesheim, Lars, 2003. "Simulation and Estimation of Hedonic Models," IZA Discussion Papers 843, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp843
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    6. Howard, Peter H., 2012. "Climate Change, Vegetation, and Welfare: Estimating the Welfare Loss to Landowners of Marginal Shifts in Blue Oak Habitat," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124744, Agricultural and Applied Economics Association.
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    8. Patrick Bajari & Jane Cooley & Kyoo il Kim & Christopher Timmins, 2010. "A Theory-Based Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution," NBER Working Papers 15724, National Bureau of Economic Research, Inc.
    9. Keane, Michael P., 2010. "Structural vs. atheoretic approaches to econometrics," Journal of Econometrics, Elsevier, vol. 156(1), pages 3-20, May.
    10. Jia, Xudong PhD & Sullivan, Edward PhD & Nuworsoo, Cornelius PhD & Hockaday, Neil, 2008. "EDAPTS Benefit/Cost Evaluation," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt0tx0q18h, Institute of Transportation Studies, UC Berkeley.
    11. Brett Day & Ian Bateman & Iain Lake, 2007. "Beyond implicit prices: recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 211-232, May.
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    14. Jia, Xdong & Sullivan, Edward, 2008. "Literature Review Report on Benefit/Cost Studies and Evaluations of Transit Management Systems," Institute of Transportation Studies, Research Reports, Working Papers, Proceedings qt40q1b3b8, Institute of Transportation Studies, UC Berkeley.
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    More about this item

    Keywords

    hedonic models; nonparametric methods; simulation; Monte Carlo; additive models; nonadditive models;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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