Estimating the willingness to pay to avoid violent crime: A dynamic approach

Research output: Contribution to journalArticle

30 Citations (Scopus)

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 languageEnglish (US)
Pages (from-to)625-629
Number of pages5
JournalAmerican Economic Review
Volume101
Issue number3
DOIs
StatePublished - May 2011
Externally publishedYes

Fingerprint

Willingness-to-pay
Hedonic model
Violent crime
Decision maker
Real estate
Household
Amenities
Implicit price

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 journalArticle

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