TY - JOUR
T1 - Valuing Time-Varying Attributes Using the Hedonic Model
T2 - When Is a Dynamic Approach Necessary?
AU - Bishop, Kelly
AU - Murphy, Alvin
N1 - Publisher Copyright:
© 2019 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
PY - 2019/3/1
Y1 - 2019/3/1
N2 - We build on the intuitive (static) modeling framework of Rosen (1974) and specify a simple, forward-looking model of location choice. We use this model, along with a series of graphs, to describe the potential biases associated with the static model and relate these biases to the time series of the amenity of interest. We then derive an adjustment factor that allows the potentially biased static estimates to be converted into forwardlooking estimates. Finally, we illustrate these concepts with two empirical applications: The marginal willingness to pay to avoid violent crime and the marginal willingness to pay to avoid air pollution.
AB - We build on the intuitive (static) modeling framework of Rosen (1974) and specify a simple, forward-looking model of location choice. We use this model, along with a series of graphs, to describe the potential biases associated with the static model and relate these biases to the time series of the amenity of interest. We then derive an adjustment factor that allows the potentially biased static estimates to be converted into forwardlooking estimates. Finally, we illustrate these concepts with two empirical applications: The marginal willingness to pay to avoid violent crime and the marginal willingness to pay to avoid air pollution.
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U2 - 10.1162/rest_a_00722
DO - 10.1162/rest_a_00722
M3 - Article
AN - SCOPUS:85062567157
SN - 0034-6535
VL - 101
SP - 134
EP - 145
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 1
ER -