Hedonic modelling

Related phrases: hedonic pricing approach, hedonic tone, hedonic model, hedonic modeling, hedonic scale, hedonic calculus, hedonic demand theory, hedonic regression, hedonic pricing, "Measure the pleasure"

For more contenders for the million dollar view, see [[1]]

Definition of Hedonic

  Relating to like or dislike.

Background

This was a page for collaborative original research on the use of hedonic models for estimating the value of a view from a building. This was planning for work in progress in 2007, published in 2008 and 2009. Two papers on the value of a (sea and veld) view were presented. The primary author was based at the School of Construction Economics and Management at the University of the Witwatersrand, Johannesburg, South Africa.

Viewpoint

The authors believe that hedonic modelling is a useful tool in assessing the value of buildings where view is an asset. This includes hotels, apartment blocks (flats), residential homes. Data on property transactions and selling points must be readily available, making this the least expensive and least complicated approach.

Preproposal planning

Beginning of a research proposal for co-authored work.

Research Question

What is the value of a view? Alternatively: What is a view worth? +/-ve

Dependent variable

Property price (ideally deeds office); rental / purchase price

Independent variables that might be available

Adjacent property prices, plot size zoned, number of bedrooms, floor area of rooms, number of bathrooms, degrees of seaview, lakes, wetlands, forest, scrub, open fields/space, parks, city scapes; water pollution, air pollution, farmland flies, car and aeroplane noise levels, mine dumps, slime dams, power lines, cellphone towers etc.

Confounding variables

Inflation of property prices, noise, access to transport and amenities, snob value, etc.

Key words

Hedonic regression modelling, property purchase prices

Importance of study

Aid to property valuation; Model can be used to reduce visual impact of new developments; Model can be used recursively by developers to optimize returns on multi-unit developments or estimate for planning and decision-making the potential impacts of construction projects.

Method

Capture valuations.
Multiple Linear Regression Analysis

Reading List

[http://www.harc.edu/Projects/Nature/Projects/Methods Valuing Nature in

Texas]

[http://www.ecosystemvaluation.org/hedonic_pricing.htm Hedonic Pricing

Method] Ecosystem Valuation Section 3

[http://www.hec.unige.ch/recherches_publications/cahiers/2003/2003.13.pdf

What’s in a View?] Steven C. Bourassa, Martin Hoesli, and Jian Sun

[http://www.doi.org/10.1111/j.0033-0124.1981.00216.x

The Effect of Environmental Amenities on House Values] by Quentin

Gillard in The Professional Geographer (1981) vol. 33 p. 216