The suitability of hedonic models for cost-benefit analysis: Evidence from commuting flows

Arnstein Gjestland, David Philip McArthur, Liv Osland and Inge Thorsen

Transportation Research Part A: Policy and Practice, 2014, vol. 61, issue C, 136-151

Abstract: We compare two estimates of benefits arising from the construction of new bridges in south-west Norway. One estimate comes from a hedonic property value model. Rather than follow an approach which is strictly theoretically correct, we adopt Rosen’s simple first-stage approach. To investigate and validate whether this simplified approach gives a reasonable estimate, we compare it to an estimate derived from a travel demand model. We find that a variant of an ex post hedonic house price model gives very similar estimates to the estimates from the travel demand model. This supports a hypothesis that the simplistic hedonic approach is reasonable.

Keywords: Road infrastructure; Benefit valuation; Time savings; Hedonic model; Method validation (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.tra.2014.01.006

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