Hedonic model of segmentation with horizontal differentiated housing
The purpose of this paper is to study how the hedonic equilibrium is modiﬁed when group-wise consumer heterogeneity with horizontal diﬀerentiated housing supply is assumed. We complete the hedonic segmentation analysis of Baudry and Maslianska¨ıa-Pautrel (2011a,b) for vertical diﬀerentiation of housing supply by investigating the more realistic case of horizontal diﬀerentiation. Our results conﬁrm the segmentation of the hedonic price function at equilibrium and the discontinuity of the implicit price of environmental quality on the borders of the segments. We also demonstrate that horizontal diﬀerentiation can lead to a partial sorting of consumer demand for housing attributes at hedonic equilibrium. Finally we show that according to model speciﬁcation, the group-wise heterogeneity with horizontal diﬀerentiation can lead to modiﬁcation of welfare assessment related to changes in environmental quality.
|Date of creation:||30 Aug 2013|
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- Marc Baudry & Masha Maslianskaïa-Pautrel, 2011. "Une remise en cause de la méthode des prix hédoniques en présence d'une segmentation de marché," Revue économique, Presses de Sciences-Po, vol. 62(3), pages 567-578.
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"Revisiting the hedonic price method to assess the implicit price of environmental quality with market segmentation,"
EconomiX Working Papers
2012-45, University of Paris West - Nanterre la Défense, EconomiX.
- Masha Maslianskaia-Pautrel & Marc Baudry, 2012. "Revisiting the hedonic price method to assess the implicit price of environmental quality with market segmentation," Working Papers hal-00759247, HAL.
- Robert A. Simons & Jesse D. Saginor, 2006. "A Meta-Analysis of the Effect of Environmental Contamination and Positive Amenities on Residential Real Estate Values," Journal of Real Estate Research, American Real Estate Society, vol. 28(1), pages 71-104.
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