TY - JOUR
T1 - Estimating the willingness to pay to avoid violent crime
T2 - A dynamic approach
AU - Bishop, Kelly C.
AU - Murphy, Alvin D.
N1 - Copyright:
Copyright 2011 Elsevier B.V., All rights reserved.
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.
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U2 - 10.1257/aer.101.3.625
DO - 10.1257/aer.101.3.625
M3 - Article
AN - SCOPUS:79958273487
VL - 101
SP - 625
EP - 629
JO - American Economic Review
JF - American Economic Review
SN - 0002-8282
IS - 3
ER -