On the Issue of Functional Form Choice in Hedonic Price Functions: Further Evidence

Academic Article

Abstract

  • / Historically, researchers applying the hedonic technique devoted little effort to testing alternative functional forms. This study used Box-Cox transformations on a hedonic model examining property value effects of a closed landfill to help select among alternative functional forms. Although this particular application found that a log-log functional form was appropriate, it appears that functional form may vary by problem and case study area selected. Benefit estimates generated using the hedonic technique may be substantial over- or underestimates if the incorrect functional form is chosen. Proximity to the landfill had no significant effect on property values.KEY WORDS: Hedonics; Functional form; Box-Cox; Landfills
  • Authors

  • Halstead, John
  • Bouvier, RA
  • Hansen, BE
  • Status

    Publication Date

  • September 1997
  • Has Subject Area

    Published In

    Keywords

  • Box-Cox
  • functional form
  • hedonics
  • landfills
  • Digital Object Identifier (doi)

    Pubmed Id

  • 9236289
  • Start Page

  • 759
  • End Page

  • 765
  • Volume

  • 21
  • Issue

  • 5