Hedonic Price Method Research Articles

The Developmental Routes Followed by Smartphone Technology Over Time (2008-2018 Period)

This paper's aim is to identify and examine the key technical attributes that propel product innovation, facilitating the prediction of swiftly evolving technological trajectories. The present study introduces the hedonic pricing method and various other approaches, which have been employed in the context of smartphone technology, comprising a sample of 738 models spanning from 2008 to 2018. The findings indicate that the progression of smartphone technology is primarily steered by technical features related to the perceptual experience of users, including the resolution in total pixels, the first and second camera in megapixels (Mpx), and storage capacity (RAM and memory in gigabytes, Gb). Implications for innovation product management are also deliberated upon.

Economic analysis of irrigation services. An application of the hedonic price method on the FADN data

Economic analysis of irrigation services. An application of the hedonic price method on the FADN data

Cost-benefits analysis of noise abatement measures in the port of Halifax, Nova Scotia, Canada

Impacts of anthropogenic noise on human beings range from physiological to phycological and include direct damage to auditory organs, to elevated stress and annoyance, to impairments in mental development. Maritime transportation operations are also recognized as a major contributor of anthropogenic noise to nearby communities. The Port of Halifax, Nova Scotia, Canada may be a contributor to these concerns because of its noise emitting operations and it being near densely populated areas. This study examines the cost and benefits of implementing noise abatement measures to reduce potential impacts on residents by limiting road and rail traffic and cargo handling noise from Port operations. The upfront investment costs of noise abatement measures are estimated and compared to the associated human health and wellbeing benefits of reducing noise exposures in exposed residential areas. The hedonic price method was used to translate the benefits of reducing noise exposures in monetary terms. Geospatial analysis was conducted to analyze extent of dwellings exposed to unsafe levels of noise before and after the implementation of abatement measures. Total costs were calculated at $6,914,318 CAD and total benefits at $4,127,870 CAD. This equates to a return of investment of $-2,786,448 CAD. Although this may appear to be an unfavourable investment for the Port of Halifax, this study presents opportunities for improvements and recommendations for noise abatement in port operations.

The Economic Effects of Stormwater Best Management Practices (BMPs) on Housing Sale Prices in Washington, D.C.

This study aims to investigate the economic effects of stormwater best management practices (BMPs) on housing sale prices in Washington, D.C., BMPs play a significant role in mitigating multiple threats, such as water pollution, soil erosion, and property damage. While studies on the economic value of BMPs were limited, literature addresses that housing sale prices can be affected by nearby stormwater BMPs. This study addresses the following research questions: Do stormwater BMPs positively impact housing sale prices? How do proximity and number of structural BMPs affect the housing sale prices? We used the hedonic pricing method by applying multiple linear regression models to determine whether a set of independent variables significantly improved the models. Our primary findings indicate that BMPs have positive, negative, or no effects on housing sale prices. The proximity of BMPs inside of parks increased housing sale prices in all buffers. In contrast, the proximity of BMPs outside of parks and impervious roads decreased housing sale prices in all buffers. Percent tree canopy coverage negatively linked to a 50 m buffer and had no relationship with other buffers on housing sale prices. This study implies that BMPs impact housing prices and can be improved by landscape architects, policymakers, and stakeholders.

The Analysis of Willingness to Accept and Willingness to Pay of Farmers and Consumers on Organic Horticultural Commodities Through Android Application-Based Digital Marketplace

Purpose: This study aims to analyze farmers' and consumers' willingness to accept and willingness to pay for organic horticultural commodities through an Android application-based digital marketplace. Theoretical Framework: Parameters in the economic assessment of natural resources and the environment involve how much individuals are willing to pay (WTP) and receive (WTA) Economic valuation methods for natural resources and the environment can be grouped into two types, namely the revealed preference approach and the stated preference approach The implied preference approach includes several techniques, such as the Travel Cost Method, Hedonic Pricing Method, and Averting Cost. On the other hand, the techniques included in the expressed preference approach involve the Contingent Valuation Method (CVM) and Conjoint Analysis. Method: This study was conducted in Semarang and Magelang Regencies, Central Java Province. The number of samples interviewed was 110 respondents spread across the two districts. The number of samples in each district was 55 respondents of producer farmers who are accustomed to growing organic horticulture and at the same time as consumers of organic horticulture. The analysis of users’ WTP and WTA of organic horticulture offered to the respondents. Results: The estimated Result of WTP Parameters of the characteristics of the product offered is one of the factors which can affect consumer willingness to pay (WTP). Consumer backgrounds such as income, number of family members, and education can also affect consumers' WTP of a product. In general, the determining factor for consumers’ WTP to be willing to pay more for organic horticulture through a digital marketplace compared to conventional horticulture is better quality. Conclusions: Consumer preference for organic horticulture is positive because the quality and taste are better than horticulture that has been planted before. Organic horticulture has the opportunity to create a market due to the positive response of producers and consumers as indicated by the WTA and WTP.

Understanding the impact of city government relocation on local residential property prices in Hangzhou, China

Public sector relocation represents a widely adopted place-based policy by national and local governments globally, serving a range of objectives such as promoting regional balance development and stimulating local growth. At the city level, local governments often anticipate substantial economic growth in the vicinity of the new government site, leading to an increase in residential property values. The new government site not only acts as a catalyst for economic activities, employment, and the concentration of amenities but also directly influences residential property transaction prices due to its impact on the market perception. This study aims to analyze the influence of government relocation on the prices of surrounding residential properties in Hangzhou, China. Hangzhou relocated its city hall from the old city center to a new central business district near the Qiantang River between 2015 and 2016. To understand the patterns of impact on residential property prices across time and space, we employ a combination of the hedonic pricing method, the difference-in-difference approach, and dynamic effect capturing techniques. Concurrent policies and amenities are considered to isolate the specific effect of government relocation. The findings reveal spatially concentrated and temporally transient positive effects. The average treatment effect over the seven-year post-relocation period was positive (4.76%), though it did not reach statistical significance. Particularly noteworthy was the significantly positive effect (12.7%) on transaction prices within a 5 km radius of the new city hall during the first year following relocation; however, this effect diminished rapidly in subsequent years. For transactions within 1 km of the new government site, the significant positive effect persisted for five years. These findings suggest that the arrival of a major public sector entity has limited direct effects on promoting the residential property market. Furthermore, the study highlights the concentrated nature of spillover effects associated with place-based programs, indicating that the positive effects are specific to certain spatial and temporal dimensions.

The Choquet integral supported by a hedonic approach for modelling preferences in hotel selection

This paper presents a methodology for modelling the hotel selection process by combining the hedonic pricing method and the Choquet integral, a multi-criteria decision-making approach. The hedonic pricing method is a valuable tool in revealed preference theory, enabling the acquisition of preferential information in a straightforward manner. In this study, we use hedonic pricing to identify the significant criteria that influence the tourism selection process and to evaluate their importance. We combine the hedonic methodology with the Choquet integral to consider not only the importance of each criterion but also the importance of each subset of criteria. This proposed hybrid technique – the Choquet integral supported by the hedonic price method – offers an effective methodology for hotel selection by taking into account the market valuation of the criteria. We apply this methodology to a database of Spanish hotels and demonstrate the validity of our proposal in introducing valuable preferential information into the hotel classification process. This approach holds potential benefits for both tourism companies and travellers.

Capitalised nonmarket benefits of multifunctional water‐sensitive urban infrastructure: A case of living streams

AbstractLiving streams are an important element of decentralised stormwater management solutions. They are actively promoted due to their ability to generate multiple ecosystem services, including water quality improvement, biodiversity protection and aesthetics. However, a lack of monetised values of ecosystem services of living stream projects makes it difficult to assess the net benefits of investing in such projects. This study uses the hedonic pricing method to estimate the capitalised amenity values of living streams and other public open spaces (POS) in housing and lot markets for the first time. The study area includes two newly greenfield‐developed suburbs in the Perth metropolitan area. We find the positive impact of living streams and other POS on the house and lot prices. However, living streams generate greater value than other types of POS. Furthermore, the POS (including living streams) that support active recreation are valued more than basic POS without active recreation features. Finally, we observe, for the first time, that the benefits of planned but not yet constructed POS (including living stream) are similar to the completed POS (including living stream) in both housing and lot markets. This information is useful for policymakers and developers making informed decisions about water‐sensitive urban infrastructure.

Assessment of the Impact of Plastic Recycling on Agricultural Land Prices: A Case Study in Vietnam

Pollution in Minh Khai, Van Lam district is seriously contributed by plastic recycling plants. Therefore, this study evaluated the impact of plastic recycling pollution on agricultural land prices in Minh Khai, Van Lam district. Hedonic price analysis was employed in analyzing the data being collected. The results show that crop yield and quality as well as agricultural land prices in the area tend to decrease due to the impact of pollution from plastic recycling. The analysis also showed land prices are positively related to crop yields, soil quality and land size while distance to the highway and quality of the irrigation water are negatively related. Based on the hedonic price method, the research shows that the price of agricultural land increases by 0.97 VND/m2 (USD 0.042 per 1000m2) when away from the plastic recycling area. It is estimated that the value of agricultural land in the district damaged by pollution is about 79 billion VND (3.4 million USD). Therefore, local authorities should implement zoning of production into concentrated areas. Hence, it is possible to invest in pollution treatment and reduce negative impacts on the external environment.

Anticipated ROI Methods for the Quantification of Servicescape Upgrading based on Intangible Values: A Literature Analysis

One of the biggest challenges faced by facilities managers is justifying the need for servicescape upgrades in monetary terms. Servicescape upgrades are often viewed as benefitting intangible aspects of business performance, such as improved levels of comfort, happiness, aesthetics, confidence, and health. This makes it difficult for facilities managers to convince upper management, particularly the finance department, that a proposed servicescape upgrade will benefit the business as there are no existing methods to anticipate a return on investment (ROI) of servicescape upgrades based on the quantification of intangible values in monetary terms. In other words, how can we determine if an improved level of comfort, happiness, pleasure, aesthetics, confidence, and health will result in profit in monetary terms? Currently, a research study is being carried out to construct a methodological framework for anticipating the ROI of servicescape upgrading based on the quantification of intangible values. The first objective of the research is to identify ROI calculation methods that can be used to anticipate the ROI of servicescape upgrade based on the quantification of intangible values. This paper reports the preliminary findings. Fifty-three literary sources, including journals, scholarly articles, website, blog posts, and books, were reviewed. Content analysis was carried out using Nvivo, and the results revealed that willingness to pay (WTP) or willingness to accept (WTA), information economic (IE), capital investment appraisal technique (CIAT), contingent valuation method (CVM), cost-benefit analysis (CBA), hedonic price method, travel cost method, comparative analysis, process of elimination, quantification technique, revealed preference, stated preference, and scenario analysis are the methods for anticipated ROI of servicescape upgrades based on the quantification of intangible values. The findings from this preliminary analysis help to identify possible methods that can be adopted in anticipating ROI based on the quantification of intangible values of servicescape upgrading.

Hedonic Price Methods and Real Estate Price Index: an Explanatory Study for Apartments Market in Belo Horizonte, Brazil, from 2004 to 2015

Brazil does not have an official real estate price index yet. A 2011 presidential decree stipulated for the Brazilian Institute of Geography and Statistics (IBGE) the assignment to create and spread a real estate price index for Brazil. In this paper, we test some different hedonic model methods to estimate quarterly price indices for apartments in Belo Horizonte, Brazil, from January 2005 to December 2015. Our goals are: i) to measure and compare the different hedonic methods; ii) to present some results that will contribute to the discussion about the development of an official real estate price index in Brazil. The empirical results corroborate the idea of intense apartment prices valuation in Belo Horizonte, mainly between 2007 and 2011, when the annual price index growth remained above 20%. These results cast light on the potential use of both hedonic methods and administrative data base to construct an official real estate price index for Brazil.

Visitors Preferences and Spatial Interaction Analysis of Taman Krida Wisata and Pijar Park

Taman Krida Wisata and Pijar Park are located on Kudus Regency. Culture and Tourism Departement of Kudus Regency informed that Taman Krida Wisata is a family recreation park with various animal statues.Youth, Sports, and Tourism Departement of Central Java informed that Pijar Park is a tourist destination that offers a tourism concept with a variety of interesting attractions and facilites. Taman Krida Wisata has an artificial tourist attraction, while Pijar Park has natural and artificial attractions. In 2020, Taman Krida Wisata had 2.588 visitors, while Pijar Park was 723. In addition, in 2019, Taman Krida Wisata was visited by 22.836 tourists, while Pijar Park was visited as many as 3.623. The two tourist areas affect the surrounding economy because there are people who take benefit from the existence of the tourist area. Besides, Taman Krida Wisata and Pijar Park have different management, visitor’s distribution, and tourist destination facility. Therefore, Hedonic Pricing Method is used to determine the value of visitors prefrences in the area and the Gravity model to determine the flow of movement berweetn the two tourist areas with nearest district, office zone, and central economic zone. There are 9 variables are used for HPM, namely tourism facility, transportation, lodging, gift center, entrance fee, health facilities, worship facilities, shopping complex, and public service area. HPM Taman Krida Wisata used 131 sample, while Pijar Park used 135 sample. Taman Krida Wisata has a hedonic value with intervals 4.000-4.189, while Pijar Park has a value 3.976-4.160. Based on the calculation of spatial interaction, Taman Krida Wisata has a higher value than Pijar Park.

High‐Temperature Exposure and Land Transactions in China

AbstractWe estimate the relationship between high‐temperature exposure and land transaction using daily transaction data from 2013 to 2018 in China. Standard hedonic price method is used to perform multidimensional fixed effects regression on 458,564 transaction samples. This study shows that each additional day of the extremely high temperature increases the average bid price by 0.6%, which is equivalent to an additional annual increase of 15.018 billion yuan in land transaction costs. The effect of high temperature on land prices is considerably stronger for residential and commercial lands. We further find that high‐temperature‐induced changes of mood and cognition play a role. Extreme gradient boosting (XGBoost) algorithm is used to calculate price deviation, which overcome missing eigenvalues and reduce nonlinear measurement error. Our findings indicate that heat can make investors more aggressive, which occurs when bidders continue to raise prices to win. The number of bidding behavior will not drop due to the hidden costs of land transactions. Specially, bidding experience offsets the cognitive output bias. This study contributes to the behavioral finance and decision‐making literature, helps investors make better investment management decisions, and alleviates the negative effect of land transaction premium on the real estate market.

Selecting independent variables in the hedonic analysis of hotel rooms

The hedonic pricing method has been applied in the analysis of hotel room rates since the early 1990s and ever since has become the norm in the investigation of hotel room price determinants. A usual problem in the specific literature is that there are no theoretical guidelines in selecting the explanatory variables in hedonic pricing models. Therefore, scholars employed in such kind of research face the challenge of which of the numerous price determinants proposed in the literature should they include in their own analysis, with the hazard of multicollinearity complicating the issue even further. The current article proposes a strategy where both the variable selection problem and the potential multicollinearity are faced by utilizing a combination of stepwise regression techniques with a proper categorization of the candidate regressors. This procedure is used in analysing the determining factors of the hotel accommodation prices in Cyprus, a country whose economy is highly dependent on tourism, for 12 consecutive months, in order to account for the inherent seasonality. The main findings suggest that adding some attributes to the advertisements of the hotels significantly increase hoteliers’ remunerations, but advertising certain other features may be actually sending negative signals, therefore hoteliers should consider excluding them from their brochures.

Influence of built environment features on Airbnb listing price and the spatio-temporal heterogeneity: an empirical study from Copenhagen, Denmark

ABSTRACT With the emergence and development of sharing economy, Airbnb has established a global impact. Relatively low price is a major factor of its popularity, but the special pricing mode leads to risk of irrational decisions. Understanding the mechanism is of great practical significance, while existing research is limited in investigation into multidimensional built environment features and heterogeneity analysis from both perspectives of space and time. Based on Hedonic Price Method, combining Ordinary Least Squares and Geographically Weighted Regression, this research explores the influence of built environment features on Airbnb listing price and the spatio-temporal heterogeneity using datasets from December 2022 (low tourist season) and June 2023 (high tourist season) in Copenhagen. It is found that six indicators in three dimensions present statistically significant influence at the local scale, which exhibits great spatial dependence as well as certain temporal non-stationarity. The framework proposed provides methodological reference for subsequent research, and the findings will facilitate more targeted regulation of the pricing of Airbnb by authorities, promote the grasp of the attributes of listings for smarter pricing by hosts, support more reasonable choices by consumers, and contribute to more refined built environment practices by urban designers.

THE INFLUENCE OF HOTEL CHARACTERISTICS ON ROOM RATES: A CASE OF VIETNAM

The effect of hotel characteristics on hotel room rates has not been adequately studied in the extant literature. The purpose of this study was to use the hedonic pricing method to measure and compare how different factors of hotels affect room rates. After collecting the data on hotel features that consumers use to make lodging decisions on the TripAdvisor website, a hedonic price model with Box-Cox transformations was built with 23 hotel characteristics. The findings indicate that hotel managers can devise strategies to improve the hotel's attractiveness and service quality, and to change and optimize hotel room rates.

WORLD HERITAGE DESIGNATION AND PROPERTY: THE IMPACT OF PRESERVATION ON THE PRICE OF HISTORIC ASSETS

The restrictions and requirements imposed by historic preservation regulations bring about many changes to the rights of property owners. They might impose additional costs, most notably by prohibiting the demolition of designated buildings and thus decreasing property-development opportunities. The objective of this study is to examine what happens following world heritage designations; specifically, if and how such designations impact the property values of historic buildings. Using the hedonic price method, we measure the value of the option to demolish and rebuild that is denied to owners of designated buildings. We also measure the value of preservation regulations, expressed in the prices of apartments in designated buildings. The study area is the “White City” of Tel Aviv, which UNESCO designated as a world heritage site. The findings suggest that the market price of a designated building is on average 12.5% lower than its theoretical value if the building was not subject to historic preservation regulations. Moreover, a premium of approximately 14% was found in the price of apartment units in designated buildings if the building underwent preservation. These findings could have a direct impact on public policies designed to promote the preservation of historical buildings in world heritage sites.

Spatial econometrics and spatial hedonic model in property valuation: A bibliometric analysis

The econometric and hedonic analysis offers reliable input in property valuation, primarily for economic studies and the country’s revenue. However, the lack of spatial reliability in statistical analysis has become a serious debate among researchers. This research is carried out to review the current trend and pattern of literature and visualize the network of the authors, countries, and keywords applied in property valuation by emphasizing the application of spatial analysis in econometric and hedonic using bibliometric analysis. The increment of documents related to spatial analysis, especially the approach of Spatial Econometric (SE) and Spatial Hedonic (SH) in property valuation, has indicated the current interest of researchers around the globe. A few bibliometric analyses are done on the Hedonic Pricing Method (HPM) and property valuation issues. Still, the attention of the review on emphasizing the spatial element is limited. Three hundred ten (310) documents are involved in the bibliometric analysis related to the property valuation issue from the Scopus database. The methodology was according to the modified Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) to provide clarity in screening and filtering documents. VOSviewer, Harzing’s Publish or Perish (PoP), and Microsoft Excel are used to ease the analysis process. This research will provide a basis to unlock new research opportunities for scholars and assist property valuation practitioners with an efficient valuation approach with spatial application. An efficient property valuation approach would drive a comprehensive insight into supporting sustainable economic and living quality. Keywords: Bibliometric, property valuation, spatial econometric, spatial hedonic

Doğu Karadeniz Bölgesinde (TR9) Konumun Oda Fiyatları üzerine Etkisinin Hedonik Fiyat Modeli ile İncelenmesi

Despite the destructive impact of the Covid-19 Pandemic, tourism is one of the Turkey’s dynamic and fastest growing sectors. In recent years, the sector started to attract visitors for alternative forms of tourism such as sports, health and nature tourism. Lately, the East Black Sea Region (TR9) is preferred by outdoor sports and nature enthusiasts. The constant growth in tourist arrivals and overnights have increased both supply and demand for tourist accommodation which is considered as a differentiated product in terms of pricing. There is a variety of attributes or 'characteristics' on the rates charged for hotel rooms. To this end, this study aims to seek the attributes that influence the overall prices of tourism facilities using hedonic price methods. The particular impact of location on room rates is investigated. The results show that star category, hotel and room size, parking, beach, and Arabic speaking staff are significantly associated with room rates. Moreover, tourists are willing to pay more for accommodations that are close to the airport and visiting sites which are mostly located in highlands in the region. Therefore, the location of accommodation establishments in the region explains the price differences in terms of accessibility and site selection. The results would be useful for hotel managers and local policy-makers in order for design their pricing policies to attract more tourists to the region.

The Economic Value of Coastal Amenities: Evidence from Beach Capitalization Effects in Peer-to-Peer Markets

Coastal amenities are public goods that represent an important attraction for tourism activities. This paper studies the capitalization effects of beach characteristics using hedonic pricing methods. We examine the implicit economic value of several beach characteristics like sand type, width, longitude, accessibility, or frontage in the Airbnb rental market. Using data for 16,663 Airbnb listings located in 67 municipalities of the Balearic Islands (Spain) during the summer of 2016, together with detailed information about the attributes of 263 beaches, our modelling approach considers interaction terms between the beach amenities and distance to the closest beach. Controlling for a set of listings’ structural characteristics, host attributes and municipality fixed effects, we find that Airbnb guests attach economic value to beach length, the presence of vegetation, the type of coastal frontage and beach accessibility and exclusivity. However, there is no evidence of capitalization effects associated with beach width or the type of sand.