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Hedonic Model with Discrete Consumer Heterogeneity and Horizontal Differentiated Housing

Masha Maslianskaïa-Pautrel ()

No CE3S-03/13, CEEES Paper Series from European University at St. Petersburg, Department of Economics

Abstract: This paper investigates how the hedonic equilibrium is modified when discrete consumer heterogeneity with horizontal differentiated housing supply is assumed. Our results are threefold. First, discrete consumer heterogeneity leads to a segmentation of the hedonic price function at equilibrium and the discontinuity of the implicit price of environmental quality on the borders of the segments. Second, we demonstrate that horizontal differentiation can lead to a partial sorting of consumer demand for housing attributes at hedonic equilibrium. Finally, we show that according to model specification, the groupwise heterogeneity with horizontal differentiation can lead to modification of welfare assessment related to changes in environmental quality.

Keywords: Hedonic model; Discrete consumer heterogeneity; Horizontal differentiation; Locational choice (search for similar items in EconPapers)
JEL-codes: R21 R31 Q51 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2013-10-09
New Economics Papers: this item is included in nep-agr, nep-dcm, nep-env and nep-ure
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Related works:
Working Paper: Hedonic Model with Discrete Consumer Heterogeneity and Horizontal Differentiated Housing (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eus:ce3swp:0313

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