Book contents
- Frontmatter
- Contents
- List of Contributors
- Acknowledgments
- Introduction
- Part One General Equilibrium Theory
- Part Two Computational Methods
- Part Three Macroeconomics and Finance
- Part Four Public Finance, Development, and Climate Change
- Part Five General Equilibrium Restrictions and Estimation of Hedonic Models
- 12 Simulation and Estimation of Hedonic Models
- Part Six Policy Uses and Performance of AGE Models
- Index
12 - Simulation and Estimation of Hedonic Models
Published online by Cambridge University Press: 14 January 2010
- Frontmatter
- Contents
- List of Contributors
- Acknowledgments
- Introduction
- Part One General Equilibrium Theory
- Part Two Computational Methods
- Part Three Macroeconomics and Finance
- Part Four Public Finance, Development, and Climate Change
- Part Five General Equilibrium Restrictions and Estimation of Hedonic Models
- 12 Simulation and Estimation of Hedonic Models
- Part Six Policy Uses and Performance of AGE Models
- Index
Summary
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 and scalar nonadditive hedonic models. 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 a maximum likelihood estimation technique. We also simulate examples of equilibria in nonadditive models and provide evidence on the performance of the nonadditive estimation techniques developed by Heckman, Matzkin, and Nesheim (unpublished working paper, 2002).
INTRODUCTION
Hedonic models are general equilibrium frameworks that characterize the pricing of differentiated goods, viewed as bundles of attributes, and the demand and supply of those goods (attributes) under different assumptions about preferences and technology. They allow a systematic economic analysis of the demand and supply of quality. Quality includes enhancement of the attributes of a good embodied in a unit of the good (such as the attributes of a house or a car, as in Rosen, 1974), characteristics of a job (risk or unpleasantness as in Tinbergen, 1956; Sattinger, 1975, 1980, 1993; Thaler and Rosen, 1975) or the amenities offered by an environmental or recreational improvement (as in Smith and Huang, 1995; Banzhaf et al., 2000).
- Type
- Chapter
- Information
- Frontiers in Applied General Equilibrium ModelingIn Honor of Herbert Scarf, pp. 277 - 340Publisher: Cambridge University PressPrint publication year: 2005
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