Social and Behavioral Sciences Commons^™

Nonparametric Estimation Of A Hedonic Price Function, Christopher Parmeter, Daniel Hnederson

Christopher F. Parmeter

Rosen’s (1974) theory of hedonic prices is implemented econometrically using recently developed nonparametric techniques to examine the influence of qualitative factors on the price of a house. Our ability to smooth categorical variables leads to greater generalization in the valuation process and provides a canvas for interactions between categorical and continuous variables that is difficult to exploit in parametric and semiparametric models. This is illustrated with a replication of a previously used partially linear model specification.