A HEDONIC MODEL OF INTERREGIONAL WAGES, RENTS, AND AMENITY VALUES

ABSTRACT This paper develops a general multimarket hedonic model appropriate for a national, interregional study of wages, housing prices, and location‐specific amenities. The model encompasses the effects of interregional location, intraurban location, and city size. Typically, hedonic studies focu...

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Published inJournal of regional science Vol. 27; no. 4; pp. 605 - 620
Main Authors Hoehn, John P., Berger, Mark C., Blomquist, Glenn C.
Format Journal Article
LanguageEnglish
Published Oxford, UK Blackwell Publishing Ltd 01.11.1987
Regional Science Research Institute
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Summary:ABSTRACT This paper develops a general multimarket hedonic model appropriate for a national, interregional study of wages, housing prices, and location‐specific amenities. The model encompasses the effects of interregional location, intraurban location, and city size. Typically, hedonic studies focus on a single market such as labor or housing and ignore interactions implicit in a more global compensation mechanism. Examination of the comparative statics of our model indicates that single‐market differentials are partial prices and are unreliable measures of amenity values in an interregional context. Unbiased amenity values are estimated for a comprehensive set of amenities using data on housing prices for 34,414 households and wages for 46,004 workers from the 1980 Census of Population and Housing. Statistically significant differences in housing prices and wages are found due to amenities.
Bibliography:Preliminary papers were presented at the Association of Environmental and Resource Economists/Allied Social Science Association Meetings in Dallas on December 29-30, 1984, and the Midwest Economics Association Meetings in Cincinnati on March 28-30, 1985. Helpful comments were made by Steven Cobb, Alan Dillingham, Shelby Gerking, Carol Gilbert, Philip Graves, F. Reed Johnson, Ronald Krumm, Ralph Luken, George Parsons, William Schulze, V. Kerry Smith, George Tolley, two anonymous referees, and participants in seminars at several universities including Chicago, Colorado, Kentucky, Toledo, Wyoming, and Vanderbilt. Support from U.S.E.P.A. Cooperative Agreement 811056-01-0 is gratefully acknowledged. Research Assistance was provided by Werner Waldner, Randy Parker, and Lisa Allison. The views expressed are the authors' alone. The sequence of authorship has been randomly assigned.
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ArticleID:JORS605
Preliminary papers were presented at the Association of Environmental and Resource Economists/Allied Social Science Association Meetings in Dallas on December 29‐30, 1984, and the Midwest Economics Association Meetings in Cincinnati on March 28‐30, 1985. Helpful comments were made by Steven Cobb, Alan Dillingham, Shelby Gerking, Carol Gilbert, Philip Graves, F. Reed Johnson, Ronald Krumm, Ralph Luken, George Parsons, William Schulze, V. Kerry Smith, George Tolley, two anonymous referees, and participants in seminars at several universities including Chicago, Colorado, Kentucky, Toledo, Wyoming, and Vanderbilt. Support from U.S.E.P.A. Cooperative Agreement 811056‐01‐0 is gratefully acknowledged. Research Assistance was provided by Werner Waldner, Randy Parker, and Lisa Allison. The views expressed are the authors' alone. The sequence of authorship has been randomly assigned.
ISSN:0022-4146
1467-9787
DOI:10.1111/j.1467-9787.1987.tb01184.x