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Combining Revealed and Stated Preference Data to Estimate Preferences for Residential Amenities: A GMM Approach

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  • Daniel J. Phaneuf
  • Laura O. Taylor
  • John B. Braden

Abstract

We show how stated preference information obtained from a choice experiment, and revealed preference information based on housing market transactions, can be combined via generalized method of moments (GMM) estimation. Specifically, we use a moment condition matching the predicted marginal willingness to pay (WTP) from a first-stage hedonic model to the marginal WTP formula implied by the choice experiment utility function. This is coupled with other moments from the choice experiment to produce GMM-based estimates of parameters that reflect the strengths of each data source. Our application values remediation of a contaminated site in Buffalo, New York, and we find evidence in support of estimates arising from our approach.

Suggested Citation

  • Daniel J. Phaneuf & Laura O. Taylor & John B. Braden, 2013. "Combining Revealed and Stated Preference Data to Estimate Preferences for Residential Amenities: A GMM Approach," Land Economics, University of Wisconsin Press, vol. 89(1), pages 30-52.
  • Handle: RePEc:uwp:landec:v:89:y:2013:i:1:p:30-52
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    References listed on IDEAS

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    Cited by:

    1. GLUMAC Brano & DES ROSIERS François, 2018. "Real estate and land property automated valuation systems: A taxonomy and conceptual model," LISER Working Paper Series 2018-09, LISER.
    2. Wiktor L. Adamowicz & Klaus Glenk & Jürgen Meyerhoff, 2014. "Choice modelling research in environmental and resource economics," Chapters,in: Handbook of Choice Modelling, chapter 27, pages 661-674 Edward Elgar Publishing.
    3. Balbontin, C. & Ortúzar, J. de D. & Swait, J.D., 2015. "A joint best–worst scaling and stated choice model considering observed and unobserved heterogeneity: An application to residential location choice," Journal of choice modelling, Elsevier, vol. 16(C), pages 1-14.
    4. Chen, Kee-Kuo & Ho, Hui-Ping & Chang, Ching-Ter, 2015. "Estimating attributes importance for container shipping industry by closing the listening gap with maximum convergent validity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 79(C), pages 145-163.

    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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