Hedonic Techniques Research Articles

The economic value of end-of-trip facilities for cyclist commuter in an office building

ABSTRACT The paper aims to investigate whether the presence of cycling-supportive facilities could add value to office buildings. Cycling to work offers numerous advantages for individuals, employers, the environment, and society, ranging from improved physical health, wellbeing and productivity to enhanced public health and reduced carbon emissions. However, the absence of secure bike parking and storage and shower and changing facilities (referred to as end-of-trip facilities) at workplace is identified as one of the hindrances to prevent more people from cycling to work. In this paper, we investigate whether office occupants are willing to pay rent premium for the end-of-trip facilities in an office building. The study uses data of office buildings across England as of the end of 2021. Hedonic technique is employed to examine whether office buildings with bike storage and shower facility command a rent premium. It is found that the buildings with bike storage and shower facility secure rent premiums, irrelevant of size and age of building and independently from any premium associated with BREEM certification. The level of rent premiums varies with location and region and is mainly driven by the shortage of the supply of these facilities.

Influence of the Urban Green Spaces of Seville (Spain) on Housing Prices through the Hedonic Assessment Methodology and Geospatial Analysis

The city of Seville (Spain) is made up of a historical network of pre-existing city overlaps, which increase the economic and heritage value of certain urban areas. To date, green spaces are one of the most important variables in determining the economic value of housing. Thus, this paper uses the hedonic technique and geostatistical analysis with GIS as a methodological approach to infer the economic influence of urban green spaces on housing prices. Along with the traditional variables used to explain dwelling prices, the size of the green space has also been taken into account as an environmental variable affecting prices. The sample consists of 1000 observations collected from Seville. According to the findings, the most relevant variables depend on the hedonic model. Still, in general terms, a dwelling’s selling price is related to basic explanatory variables such as living area, number of rooms, age, and number of baths. The green area per inhabitant present in a dwelling’s district is also included as part of these basic explanatory variables. In conclusion, the hedonic linear model is the model that best fits housing prices where the values are similar to those obtained by kriging regardless of the district. Based on this research, each square meter of green space per inhabitant in a district raises the housing value by 120.19 €/m2.

Information transparency and pricing strategy in the Scottish housing market

PurposeInformation transparency is crucially important in price setting in real estate, particularly when information asymmetry is concerned. This paper aims to examine how a change in government policy in relation to information disclosure and transparency impacts residential real estate price discovery. Specially, this paper investigates how real estate traders determined asking prices in the context of the Scottish housing market before and after the implementation of the Home Report, which aimed to prevent artificially low asking prices.Design/methodology/approachThis paper uses spatial lag hedonic pricing models to empirically observe how residential asking prices are determined by property sellers in response to a change in government policy that is designed to enhance market transparency. It uses over 79,000 transaction data of the Aberdeen residential market for the period of Q2 1998 to Q2 2013 to test the models.FindingsThe empirical findings provide some novel insights in relation to the price determination within the residential market in Scotland. The spatial lag models suggest that spatial autocorrelation in property prices has increased since the Home Report came into effect, indicating that property sellers have become more prone to infer asking prices based on prior sales of dwellings in close vicinity. The once-common practice of setting artificially low asking prices seems to have dwindled to a certain extent statistically.Originality/valueThe importance of understanding the relationship between information transparency and property price determination has gathered momentum over the past decade. Although spatial hedonic techniques have been extensively used to study the impact of various property- and neighbourhood-specific attributes on residential real estate market in general, surprisingly little is known about the empirical relationship between spatial autocorrelation in real estate prices and information transparency.

Smartphone banking usage in Nigeria: Gamification, technology acceptance and cultural factors empirical perspectives

AbstractSeveral studies have been conducted within the domain of technology adoption, yet, less attention has been paid to how gamification can be employed to elicit fun that can accelerate the rate of smartphone banking usage. Equally, the cultural peculiarities of smartphone banking users have been largely ignored by the majority of the previous studies. This study, therefore, identified the potential influence of the utilization of gamification, hedonic motivation, and cultural factors in the usage of smartphone banking. This is achieved through the conceptualization of a framework that empirically tested the influence of six exogenous variables on smartphone usage using data from 388 respondents from Nigeria, and having employed Partial Least Square (PLS) Structural Equation Modeling as a technique of analysis. The findings of the study reveal that gamification, hedonic motivation, and cultural factors along with the Technology Acceptance Model core variables are strong determinants of Smartphone Banking usage. Practitioners can draw significant insights on how to effectively design smartphone banking using gamification and hedonic techniques, especially that the trend is moving largely towards these directions in the financial industry and through which value can be created for users.

Effects of Environmental Quality on Urban Housing Prices: A Hedonic Multiple Linear Regression Model Approach

While studies on the valuation of urban environmental amenities have been limited in developing countries, their scarcity is even amplified in the Sub-Saharan Africa and Zimbabwe is no exception. For a city such as Gweru, this particular study is among the few done so far. The aim of this research is to investigate the effects of environmental conditions in a given area on the residential location. We randomly sampled 800 households and the Hedonic Pricing Regression technique was applied to analyse whether environmental quality does have a significant effect on housing prices in the city of Gweru. The set of considered variables was carried out from a location choice survey and Hedonic regression estimators are presented to verify to what extent a relationship between the accessibility conditions, environmental context and the dwelling market values does exist. Based on the estimated model, the results revealed that vegetation, sewage system, water supply and distance from the central business district (CBD) are environmental characteristics that have a bearing on property prices with sewer availability being the most significant variable that affects the price. Residents are willing to trade-off clean air (air pollution) for proximity to the CBD. The findings suggest that properties (houses) are composite goods whose demand is greatly influenced by the health-related attributes they offer. On this basis, recommendations are for the Municipalities to ensure affordable housing that also meets the minimum health standards while relevant departments and land developers should include such amenities to assist and generate the highest value on a parcel of land or house.

Do home buyers value the New Urbanist neighborhood? The case of Issaquah Highlands, WA

ABSTRACT This study compares Issaquah Highlands’ home prices with those of traditional suburban single-family homes in the city of Issaquah. Issaquah Highlands is a community that was developed using New Urbanism principles. The null hypothesis is that the sale prices of houses in Issaquah Highlands are not different from the conventional suburban neighborhood in the city of Issaquah. The principal database consists of US Census Washington State Geospatial Data Archive, and the King County Tax Assessments. The final dataset contains 1,780 single family homes over the seven-year period from 2012 to 2018 based on sale records throughout the city of Issaquah. This study uses the hedonic pricing technique to assess the impact of New Urbanism on the value of single-family residences. The findings suggest that people are willing to pay a $92,700–96,800 premium (approximately 7.1–12.0 percent of the sales prices) for houses in Issaquah Highlands.

The Value of Terroir: A Historical Analysis of the Bordeaux and Champagne Geographical Indications

AbstractPrevious studies on the value ofterroir, or more generally geographical indications (GI), used hedonic techniques. We use historical data and exploit temporal and geographical variations in the introduction of wine GIs in early twentieth century France to study the impact on the price of specific wines in the years and decades following their introduction. We find large effects of GIs on prices of some Champagne wines, but no significant impact on Bordeaux or other Champagne wines.

A New Hedonic Method for Measuring Mortgage Default Risk

Measuring and monitoring the true level of mortgage delinquencies across an economy is essential for asset pricing and financial system stability. Yet public measures of mortgage default risk almost always use simple averages across pools of individual assets, including balance-sheet loans or indices tracking default risk across portfolios of residential mortgage-backed securities (RMBS). These approaches are, like median house price indices, afflicted by compositional biases that can lead to spurious inferences regarding the direction of default rates. Sources of bias include artificial changes in default rates attributable to: increases in the volume of new loans being written or (securitised RMBS added to indices); changes in the proportion of transactions with higher loan-to-value ratios (LVRs); the introduction of less seasoned RMBS transactions with a lower weighted-average loan age; and/or shifts in borrower characteristics that have higher probabilities of default (e.g. tilts towards investment borrowers). To address this problem, we have developed the first known hedonic regression-based indices of empirical mortgage default risk that explicitly control for compositional biases through the models’ characteristic-based independent variables. Whereas simple average measures of default rates across securitised loan portfolios have declined in recent years, which suggests that the risk of loss has been falling, our hedonic mortgage default index implies exactly the opposite: that is, compositionally-adjusted default rates have, in fact, been increasing sharply in recent times. In addition to delinquency rates, we apply similar hedonic regression techniques to create a compositionally-adjusted index for RMBS prepayment rates, which shows a sharp decline in prepayments from 2017 to late 2018.

How relevant are generalist real estate indices in emerging markets?

Real estate indices often rely on strong constant quality assumptions and are too general to be carefully considered by investors. Hedonic techniques are more rigorous than median-price measures to control for quality of the assets in place and the quality of the assets that are put on the market at different times. This research aims to investigate how these limitations affect the usefulness of indicators available in the Brazilian market and how specialized, technically superior (and relatively easy-to employ), indices can contribute to improve performance measurement in emerging real estate markets. To do this, we use an appraisal-based rent dataset from Sao Paulo to create two types of time-dummy measures for office properties. To our records, there appears to be no studies that cover the recent meltdown in this market in such level of detail or that compare the performance of different time-dummy methods. The first model ⬜ standard ⬜ includes time dummies, submarket dummies and property-specific attributes as controls for building quality. The second ⬜ fixed effect ⬜ is an alternative model, where we consider time dummies, time-varying characteristics and property-specific fixed effects. The latter approach deals with time-unvarying locational and property-specific unobserved heterogeneity. Our results reinforce that obtuse measures available often fail to disentangle specific aspects of real estate cycles, which tend to be quite prominent in emerging real estate markets.

Constructing an Index of Persian Rug Prices

A number of researchers have studied the price appreciation over time of art objects. However, to our knowledge, no previous academic research has focused on Persian rugs. Using hedonic regression techniques in this paper we address this deficit and construct an index of Persian rug prices from data provided by Christie’s auction house. We find that the average, annual real price appreciation of this index between 1995 and 2015 is 4.10%, a higher real return than generated by many other art objects studied previously in the literature. We also found that the returns on this index had a low correlation with the returns generated by the UK stock and government bond markets. Given the estimated return and the low correlation with traditional asset classes, an investment in a diversified holding of Persian rugs might represent an attractive diversifying option, particularly for long-term institutional investors like university endowments, insurance companies, pension funds or family offices.

The Recent Slowdown in Sao Paulo's Office Market: A Comparison of Hedonic Indices

Real estate indices often rely on strong constant quality assumptions. Hedonic techniques are more rigorous than median-price measures to control for quality of the assets in place or the quality of the assets that are put on the market at different times. We use a unique appraisal-based rent dataset from Sao Paulo to create two types of time-dummy measures for office properties. To our records, there appears to be no studies that cover the recent meltdown in this market or that compare the performance of different time-dummy methods. The first model – standard – includes time dummies, submarket dummies and property-specific attributes. The second – fixed effect – is an alternative model, where we consider time dummies, time-varying characteristics (age) and property-specific fixed effects. This latter approach deals with time-unvarying locational and property-specific unobserved heterogeneity. The resulting indices reflect to some extent the cyclicality of rent. Consistent with market segmentation theory, our findings support submarket and building class stratification to account for different niche performance. The standard model is often biased upwards, especially in growth locations and among top-tier properties, where supply is more flexible. This methodology limits our ability to control for properties within submarket level. Rigid time-unvarying hedonics fail to disentangle property-specific features when new buildings are added to the sample non-randomly.

The amenity value of the British climate

This study explores the amenity value of climate to households in Britain. We employ the hedonic technique and use household panel data to derive the marginal willingness to pay for small changes in climate variables. We analyse both the housing and the labour market. Climate is described in terms of heating, cooling degree and rain days. Evidence suggests that it is the housing market that mainly compensates for climate amenities. According to the results, the relationship between property prices and climate has an inverted u-shape. For the sample, about 50 per cent of the locations are close to the preferred levels of heating and cooling degree days while the results for rain days are more varied. Connecting the results to projections of climate change leads to the conclusion that future developments are likely to move a number of households further away from their preferred climate, thus leading to larger regional disparities.

Elaboración de galletas enriquecidas a partir de una mezcla de cereales, leguminosas y tubérculos. Chachapoyas, región Amazonas

El objetivo principal de esta investigación fue fomentar a la innovación de productos propios de la zona, y de esta manera aprovechar las potencialidades de las propiedades que muestran estos productos y la importancia de uso en la nutrición de alimentación infantil. El objetivo específico de esta investigación fue enriquecer las galletas a nivel nutricional y sabor, para cumplir este objetivo se sustituyó en parte la harina de trigo por productos de la zona como el Pajuro y la Oca. Las etapas del flujo del proceso fueron las siguientes: La formulación de los ingredientes, mezclado, amasado, moldeado, horneado y enfriado. Se evaluaron contenido de proteína total, humedad y ceniza de las diferentes galletas formuladas. Así mismo, se realizó el análisis sensorial donde participaron 31 niños de 10 años de edad, preseleccionadas y entrenados, quienes evaluaron el sabor, mediante la técnica hedónica. Donde el tratamiento siete fue el resultado de esta investigación.

Lake Drawdown Revisited: The Value Of Two Inches Of Water

This paper uses a hedonic price model to estimate the impact of water level on the value of real estate on Lake Koshkonong in Wisconsin. Hedonic techniques are employed to show that a reduction in the lake’s water level has a significant effect on shoreline property values. The body of existing research demonstrates that changes in both the subjective and objective indicators of value are important for estimating the implicit value of water quality in hedonic analysis. This paper provides new evidence on the economic harm to lake communities created by the reduction of water levels.

Book Reviews

Daniel E. Sichel of Wellesley College and NBER reviews “A Practical Guide to Price Index and Hedonic Techniques”, by Ana M. Aizcorbe. The Econlit abstract of this book begins: “Examines price index and hedonic techniques, focusing on the application of these techniques and interpreting the resulting measures. Aizcorbe is Research Professor in the Virginia Bioinformatics Laboratory at Virginia Polytechnic Institute and State University.”

PRICING ATTRIBUTES OF WINES FROM EMERGING SUPPLIERS ON THE BRITISH COLUMBIA MARKET

We examine British Columbia (BC) wine consumers’ valuation of wine imported from emerging suppliers (Argentina, Bulgaria, Chile, Croatia and Hungary) using hedonic pricing technique. BC Liquor Distribution Branch retail sales data covering weekly sales of table wine imported into the province of British Columbia from all five countries for the period April 20th, 2002 to May 8th, 2004 are applied to estimate the influence of wine attributes on prices. The results indicate that grape variety, brand name, country of origin, and alcohol content are important factors influencing prices paid by consumers. In particular, Chilean white and red wines are associated with larger price premia as compared to Argentinean wines. Wines from Hungary, Bulgaria, and Croatia, although sold in large quantities in the BC market, are substantially discounted in comparison to New World wines. Cabernet Sauvignon fetches a higher price when blended with other varietals and Chardonnay appears to be popular and highly valued by consumers among white wines.

Housing and the cost of living in early modern Toledo

Data on housing costs and rental markets for the early modern period are notoriously scarce. Using a new database of rent paid on 183 properties belonging to the Cathedral Chapter of Toledo between 1489 and 1600, we reconstruct housing costs for various social groups and trace the effect of exogenous shocks on the rental market using hedonic techniques. We document a well-functioning market that responded swiftly and predictably to exogenous shocks. We then explore the impact of adding rent to early modern price indices and estimates of living standards. Price indices show a moderate effect. The addition of rent reduces the gap between Toledo and two northern European locations by up to 9.5%.

Valuing country of origin and organic claim

Purpose – The purpose of this paper is to identify and quantify the factors determining the prices of organic and conventional cheese. For a market with a high degree of product differentiation, i.e. the German cheese market, price premiums of various cheese attributes are examined. Thereby, special attention is paid to country of origin (CO) effects, geographical indications (GIs) and organic claims. Design/methodology/approach – The analysis is based on homescan panel data of 13,000 representative German households provided by the GfK consumer research association. The data set combines actual purchase and demographic data for a five-year sample period from 2004 to 2008. Applying the hedonic technique, the cheese price is modelled as a function of a wide range of consumer, store and product characteristics. Effects are analysed in detail by distinguishing between supply- and demand-side effects and by estimating price regressions not only for the whole sample but also for different shop types. Findings – The estimated organic price premiums range between 18 per cent in discount shops and 26 per cent in hypermarkets. The impacts of the CO and GIs are considerably smaller in magnitude and limited to special shopping venues like super- and hypermarkets. Originality/value – The German cheese market is currently evolving from a staple product market to a highly differentiated market where increasing attention is paid to quality indicators such as organic claims or GIs. The data are remarkable, both in sample size and information content. Furthermore, the estimation of shop type-specific price premiums offers new and detailed insights in consumer valuation and producer costs of a wide range of cheese attributes.

Hedonic Estimates of Neighborhood Ethnic Preferences

This article uses a new hedonic technique to examine households’ ethnic preferences and help assessors estimate the impact of neighborhood ethnicity on housing prices. A hedonic function, which relates housing and neighborhood characteristics to house values, is the envelope of households’ bids for these characteristics. This article derives this envelope by combining theories about household sorting across neighborhoods with constant-elasticity demand functions for neighborhood characteristics and housing. Estimates for the Cleveland area in 2000 find that some households prefer neighborhoods without black or Hispanic residents, whereas others prefer largely black or Hispanic neighborhoods, and that house values reflect ethnic preferences.

Re-examining procurement tenders with respect to price: a transaction cost model of Portland procurement agencies

Past research has provided a variety of model approaches which are intended for the use of detecting improprieties in the bidding process for public procurement auctions. Recent literature has moved beyond traditional bid price models and seeks to incorporate various non-price factors, such as vendor utility, into bid rigging modelling efforts. In response, the following research aims to incorporate specific non-price factors such as vendor distance to site, vehicles owned, etc., to demonstrate, while using transaction cost economic (TCE) theory, that these complex price models – hedonic price models – can incorporate non-price factors as a function of vendor price mechanisms. Future implications of hedonic techniques in procurement bidding analysis are also discussed with regard to their potential usefulness for detecting collusive behaviour. Data, which contains both bids accused of collusion and competitive bids, were collected and coded to include variables omitted from other OLS models. The hedonic model tested was found to improve upon modelling capabilities of standard OLS models creating possibilities for more extensive research into detailed price modelling focusing on bidding improprieties.