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Title:

Housing Attributes: Using SP–RP Methods to Revisit Hedonic and Bid Rent Approaches for Estimating Values

Accession Number:

01559845

Record Type:

Component

Availability:

Transportation Research Board Business Office

500 Fifth Street, NW
Washington, DC 20001 United States

Abstract:

The author explores the relationship between the Rosen hedonic housing model (1) and the Ellickson (2) bid rent model for estimating the value of housing attributes. Using recently developed methods of Train and Wilson (3&4) for SP-RP approaches the author links both the hedonic and bid rent approaches. This allows the author to directly compare parameter estimates converted to dollar values between traditional hedonic methods and SP-RP methods. The author selects the value of time estimates for comparison as this variable is critical for policy evaluation in travel and land use studies. With respect to travel time the derived housing price gradients from SP-RP methods are much steeper than those measured from classic hedonic RP methods. Following Rosen the hedonic methods critically depend on the existence of competitive equilibrium and zero “excess profits”. Due to regulatory and financing restrictions in the Portland Metro area The author experiences a severe supply limitation that does not support a competitive spatial equilibrium. Consequently, only households in a position to have a large consumer surplus enter the market; thereby self selecting for a unique market segment. Similarly, RP based bid rent models by virtue of using random draws to reflect rejected alternatives after McFadden (5) may be biased by unaccounted sample heterogeneity. The author concludes that SP-RP approaches provide a valuable experimental option for both RP based hedonic and bid rent modeling.

Supplemental Notes:

This paper was sponsored by TRB committee ADD30 Transportation and Land Development.

Monograph Accession #:

01550057

Report/Paper Numbers:

15-3028

Language:

English

Corporate Authors:

Transportation Research Board

500 Fifth Street, NW
Washington, DC 20001 United States

Authors:

Conder, Sonny

Pagination:

16p

Publication Date:

2015

Conference:

Transportation Research Board 94th Annual Meeting

Location: Washington DC, United States
Date: 2015-1-11 to 2015-1-15
Sponsors: Transportation Research Board

Media Type:

Digital/other

Features:

Figures; References; Tables

Identifier Terms:

Hedonic price method

Subject Areas:

Data and Information Technology; Highways; Planning and Forecasting; I72: Traffic and Transport Planning

Source Data:

Transportation Research Board Annual Meeting 2015 Paper #15-3028

Files:

TRIS, TRB, ATRI

Created Date:

Dec 30 2014 1:01PM