Abstract
The hedonic model, which has been used extensively in the Environmental, Urban, and Real Estate literatures, allows for the estimation of the implicit prices of housing and neighborhood attributes, as well as households®demand for these non-marketed amenities. A recognized drawback of the existing hedonic literature is that the models assume a myopic decision-maker. In this paper, we estimate a dynamic hedonic model and find that the average household is willing to pay $472 per year for a ten percent reduction in violent crime. In addition, we find that the traditional, myopic model suffers from a 21 percent negative bias.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 625-629 |
| Number of pages | 5 |
| Journal | American Economic Review |
| Volume | 101 |
| Issue number | 3 |
| DOIs | |
| State | Published - May 2011 |
| Externally published | Yes |
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ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Estimating the willingness to pay to avoid violent crime : A dynamic approach. / Bishop, Kelly; Murphy, Alvin.
In: American Economic Review, Vol. 101, No. 3, 05.2011, p. 625-629.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Estimating the willingness to pay to avoid violent crime
T2 - A dynamic approach
AU - Bishop, Kelly
AU - Murphy, Alvin
PY - 2011/5
Y1 - 2011/5
N2 - The hedonic model, which has been used extensively in the Environmental, Urban, and Real Estate literatures, allows for the estimation of the implicit prices of housing and neighborhood attributes, as well as households®demand for these non-marketed amenities. A recognized drawback of the existing hedonic literature is that the models assume a myopic decision-maker. In this paper, we estimate a dynamic hedonic model and find that the average household is willing to pay $472 per year for a ten percent reduction in violent crime. In addition, we find that the traditional, myopic model suffers from a 21 percent negative bias.
AB - The hedonic model, which has been used extensively in the Environmental, Urban, and Real Estate literatures, allows for the estimation of the implicit prices of housing and neighborhood attributes, as well as households®demand for these non-marketed amenities. A recognized drawback of the existing hedonic literature is that the models assume a myopic decision-maker. In this paper, we estimate a dynamic hedonic model and find that the average household is willing to pay $472 per year for a ten percent reduction in violent crime. In addition, we find that the traditional, myopic model suffers from a 21 percent negative bias.
UR - http://www.scopus.com/inward/record.url?scp=79958273487&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=79958273487&partnerID=8YFLogxK
U2 - 10.1257/aer.101.3.625
DO - 10.1257/aer.101.3.625
M3 - Article
VL - 101
SP - 625
EP - 629
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 3
ER -