Citation

Bishop KC, Murphy AD. Am. Econ. Rev. 2011; 101(3): 625-629.

Copyright

(Copyright © 2011, American Economic Association)

DOI

10.1257/aer.101.3.625

PMID

unavailable

Abstract

The hedonic model, which has been used extensively in the Environmental, Urban, and Real Estate literatures, allows for the estimation of the implicit prices of housing and neighborhood attributes, as well as households' demand for these non-marketed amenities. A recognized drawback of the existing hedonic literature is that the models assume a myopic decision-maker. In this paper, we estimate a dynamic hedonic model and find that the average household is willing to pay $472 per year for a ten percent reduction in violent crime. In addition, we find that the traditional, myopic model suffers from a 21 percent negative bias.

Language: en

Keywords

Consumer Economics: Empirical Analysis, Illegal Behavior and the Enforcement of Law, Urban, Rural, and Regional Economics: Regional Migration; Neighborhood Characteristics; Population; Regional Labor Markets