Question
Asked Dec 4, 2019
273 views
  1. What measurement issue is hedonic pricing meant to fix? Be specific as possible as why as measurements without it can fail to capture what the relevant statistic was designed to capture. How does it work in practice?

check_circle

Expert Answer

Step 1

The hedonic price method is used to measure implicit price pertaining to a non-market good by using the surrogate goods. For example, house prices are being used for providing a value of specific environmental elements. It is a well-known fact that individuals are ready to pay a premium price if the house is located nearby a tourist place, but they may want to get a discount on a particular house which is located nearby a mining site.

Step 2

Price of house as well as other properties cannot be measured by only one variable. Different factors to be considered for its determination are:

      • Property features.
      • Knowledge about the location.
      • Determinants of environment.
Step 3

The hedonic price method uses the technique of regression analysis to measure relative importance taking into consideration the independent variables of prices of house and property. If, for example, using regression analysis we can find the correlation be...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Operations Management

Other

Related Operations Management Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Give an example of a cost trade- off in logistics.

A: The following are the two main components involved in the cost trade-off in logistics:Warehouse cost...

question_answer

Q: Conduct a brief SWOT (strengths, weaknesses, opportunities, threats) analysis for the organization

A: Strengths of BYD Auto:Capability of the firm in the battery production that can be used to automobil...

question_answer

Q: Discuss how a development in a corporation’s natural and societal environments can affect the corpor...

A: The way the development in a natural and societal environment affect the corporation through task en...

question_answer

Q: Whats aspects of restaurant work that are especially challenging to wait staff and how does Barcelon...

A: At first it is important to know who is a wait staff. The word ‘wait’ resembles its own meaning, whi...

question_answer

Q: When a patient enters the Valley Health Clinical Laboratory to have his blood drawn and a Chemistry ...

A: Given information:Number of techs (N)               = 3Operating time per day (H)    = 8 hours      ...

question_answer

Q: Three recent college graduates have formed a partnership and have opened an advertising firm. Their ...

A: Precedence DiagramThe precedence diagram is as shown in the diagram below:

question_answer

Q: Define 2 different archetypes Limits of Growth and Shifting the Burden. What is their relationship? ...

A: Different types of Archetypes:1)Limits to growth2)shifting the Burden3)Escalation4)Fixes that fail5)...

question_answer

Q: When does diversification becomes less productive?

A: Diversification becomes less productive when the generation of revenue from the diversified product/...

question_answer

Q: Skinner's fish market buys fresh boston bluefish daiily for $4.20 per pound and sells it for $5.50 p...

A: Uniform DistributionSince a uniform distribution has been assumedAverage (expected) demand = (320 + ...