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Title: Estimating Hedonic Models of Consumer Demand with an Application to Urban Sprawl

Citation Type: Book, Section

Publication Year: 2008

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Abstract: In this paper, we describe a method for estimating hedonic models of consumer demand using a methods described in Bajari and Benkard (2005) and Bajari and Kahn (2005). We apply our methods to understanding suburbanization and the associated urban sprawl using a unique data set form Los Angeles in 2000-2003. Urban sprawl has both costs and benefits. One cost of sprawl is that commute times are increased since homes and places of work are more dispersed. A benefit is that sprawl allows consumers to purchase larger homes and lots. This paper uses a new data set on housing transactions in Los Angeles County to compare some costs (increased commuting) and benefits (larger homes) of sprawl. We use new methods in demand estimation to recover how heterogeneous home buyers tradeoff commuting versus larger homes at the margin. Finally, we evaluate the partial equilibrium welfare effects of two anti-sprawl policies.

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Authors: Kahn, Matthew E.; Bajari, Patrick

Editors: Andrea Baranzini, Josamirez Caroline Schaerer

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Volume Title: Hedonic Methods in Housing Markets: Pricing Environmental Amenities and Segregation

Publisher: Springer

Publisher Location: New York, NY

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Data Collections: IPUMS USA

Topics: Housing and Segregation, Other

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