The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Hedonic Prices

  • Lars Nesheim
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_2370

Abstract

Hedonic price functions describe the equilibrium relationships between characteristics of products and their prices. They are used to predict prices of new goods, to adjust for quality change in price indexes, and to measure consumer and producer valuations of differentiated products. They emerge as market outcomes from both competitive and non-competitive markets. The functional form is determined by the distribution of buyers and their preferences, the distribution of sellers and their costs, and the structure of competition in the market.

Keywords

Arbitrage Assortative matching Bundling Cost-of-living indexes Hedonic preferences Hedonic price functions Household production Imperfect competition Laspeyres index Misspecification Nonparametric methods Paasch index Pure strategy Nash equilibrium Willingness to pay 

JEL Classifications

D0 D4 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Lars Nesheim
    • 1
  1. 1.