The suitability of hedonic models for cost-benefit analysis: Evidence from commuting flows
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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Volume (Year): 61 (2014)
Issue (Month): C ()
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