Valuing Product Attributes Using Single Market Data: A Comparison of Hedonic and Discrete Choice Approaches
Abstract:
This paper compares, via simulation, the performance of the multinomial logit and hedonic models in estimating consumer preferences for product attributes. The authors ascribe preferences over the attributes of houses to a population of consumers and, by having them bid for a set of houses, calculate equilibrium prices. The resulting data are used to estimate the two models.