Hedonic Model with Discrete Consumer Heterogeneity and Horizontal Differentiated Housing

Masha Maslianskaia Pautrel ()
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Masha Maslianskaia Pautrel: LEG, University of Dijon
Authors registered in the RePEc Author Service: Masha Maslianskaïa-Pautrel ()

No 2015.07, Working Papers from FAERE - French Association of Environmental and Resource Economists

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 may lead to a partial sorting of consumer demand for housing attributes at hedonic equilibrium. Finally, we show that the discrete consumer 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: Q51 R21 R31 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2015-03
New Economics Papers: this item is included in nep-dcm, nep-mkt and nep-ure
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http://faere.fr/pub/WorkingPapers/Maslianskaia%20Pautrel_FAERE_WP2015.07.pdf First version, 2015 (application/pdf)

Related works:
Working Paper: Hedonic Model with Discrete Consumer Heterogeneity and Horizontal Differentiated Housing (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2015.07

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