Hedonic methods for baskets of goods

Rachel Griffith and Lars Nesheim

Economics Letters, 2013, vol. 120, issue 2, 284-287

Abstract: Existing hedonic methods cannot be easily adapted to estimate willingness to pay for product characteristics when willingness to pay depends on a very large basket of goods. We show how to marry these methods with revealed preference arguments to estimate bounds on willingness to pay using data on purchases of seemingly impossibly high dimensional baskets of goods. This allows us to use observed purchase prices and quantities on a large basket of products to learn about individual household’s willingness to pay for characteristics, while maintaining a high degree of flexibility and also avoiding the biases that arise from inappropriate aggregation.

Keywords: Hedonic prices; Scanner data; Willingness to pay; Organic (search for similar items in EconPapers)
JEL-codes: C8 D1 D4 L1 L8 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:120:y:2013:i:2:p:284-287

DOI: 10.1016/j.econlet.2013.04.040

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