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Hedonic prices for environmental and safety characteristics and the Akerlof effect in the French car market

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  • C. Couton
  • F. Gardes
  • Y. Thepaut

Abstract

In this paper, the computation of hedonic prices on individual panel data shows the positive valuation of environmental and safety characteristics by the market and gives some evidence of an Akerlof effect between perceived quality and the part of the market price which is not explained by car characteristics and pure inflation.

Suggested Citation

  • C. Couton & F. Gardes & Y. Thepaut, 1996. "Hedonic prices for environmental and safety characteristics and the Akerlof effect in the French car market," Applied Economics Letters, Taylor & Francis Journals, vol. 3(7), pages 435-440.
    • Handle: RePEc:taf:apeclt:v:3:y:1996:i:7:p:435-440
    DOI: 10.1080/758540801
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    1. Ohta, Makoto & Griliches, Zvi, 1986. "Automobile Prices and Quality: Did the Gasoline Price Increases Change Consumer Tastes in the U.S.?," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(2), pages 187-198, April.
    2. Ohta, Makoto, 1987. "Gasoline Cost and Hedonic Price Indexes of U.S. Used Cars for 1970-1983," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(4), pages 521-528, October.
    3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    4. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    5. Bartik, Timothy J, 1987. "The Estimation of Demand Parameters in Hedonic Price Models," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 81-88, February.
    6. Cubbin, John S, 1975. "Quality Change and Pricing Behaviour in the United Kingdom Car Industry 1956-1968," Economica, London School of Economics and Political Science, vol. 42(165), pages 43-58, February.
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    Citations

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    Cited by:

    1. Ebru Caglayan Akay & mer Faruk Bolukbasi & Engin Bekar, 2018. "Robust and Resistant Estimations of Hedonic Prices for Second Hand Cars: an Application to the Istanbul Car Market," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 39-47.
    2. Prieto, Marc & Caemmerer, Barbara & Baltas, George, 2015. "Using a hedonic price model to test prospect theory assertions: The asymmetrical and nonlinear effect of reliability on used car prices," Journal of Retailing and Consumer Services, Elsevier, vol. 22(C), pages 206-212.
    3. Okay Gunes, 2017. "Hedonic Recommendations: An Econometric Application on Big Data," Documents de travail du Centre d'Economie de la Sorbonne 17061, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    4. Ramírez Muñoz de Toro, Gonzalo R. & Uriarte, Juan I. & Delbianco, Fernando & Larrosa, Juan M.C., 2017. "Un modelo hedónico de precios en línea de automóviles usados en Argentina || A Hedonic Model of Online Prices of Used Cars in Argentina," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 24(1), pages 25-53, Diciembre.
    5. Okay Gunes, 2017. "Hedonic Recommendations: An Econometric Application on Big Data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01673355, HAL.
    6. G Baltas & C Saridakis, 2010. "Measuring brand equity in the car market: a hedonic price analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(2), pages 284-293, February.
    7. Sylvain Prado, 2009. "The European used-car market at a glance: Hedonic resale price valuation in automotive leasing industry," Working Papers hal-04140873, HAL.
    8. Nicolas Vaillant & Philippe Lesot & Quentin Bonnard & Valerie Harrant, 2010. "The use of expert opinion, quality and reputation indicators by consumers: evidence from the French vaulting stallion semen market," Applied Economics, Taylor & Francis Journals, vol. 42(6), pages 739-745.
    9. Galarraga, Ibon & González-Eguino, Mikel & Markandya, Anil, 2011. "Willingness to pay and price elasticities of demand for energy-efficient appliances: Combining the hedonic approach and demand systems," Energy Economics, Elsevier, vol. 33(S1), pages 66-74.
    10. Fullerton, Don & West, Sarah E., 2002. "Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 135-157, January.
    11. José Moraga-González & Noemi Padrón-Fumero, 2002. "Environmental Policy in a Green Market," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(3), pages 419-447, July.
    12. Ibon Galarraga & David Heres Del Valle & Mikel González-Eguino, 2011. "Price Premium for High-Efficiency Refrigerators and Calculation of Price-Elasticities for Close-Substitutes: Combining Hedonic Pricing and Demand Systems," Working Papers 2011-07, BC3.
    13. Sylvain M. Prado, 2009. "The European used-car market at a glance: Hedonic resale price valuation in automotive leasing industry," Economics Bulletin, AccessEcon, vol. 29(3), pages 2086-2099.
    14. Okay Gunes, 2017. "Hedonic Recommendations: An Econometric Application on Big Data," Post-Print halshs-01673355, HAL.
    15. Wells, Peter & Varma, Adarsh & Newman, Dan & Kay, Duncan & Gibson, Gena & Beevor, Jamie & Skinner, Ian, 2013. "Governmental regulation impact on producers and consumers: A longitudinal analysis of the European automotive market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 47(C), pages 28-41.
    16. Guillaume Gaulier & Séverine Haller, 2000. "The Convergence of Automobile Prices in the European Union: an Empirical Analysis for the Period 1993-1999," Working Papers 2000-14, CEPII research center.

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