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A HEDONIC MODEL OF INTERREGIONAL WAGES, RENTS, AND AMENITY VALUES

ABSTRACT This paper develops a general multimarket hedonic model appropriate for a national, interregional study of wages, housing prices, and location‐specific amenities. The model encompasses the effects of interregional location, intraurban location, and city size. Typically, hedonic studies focu...

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Bibliographic Details
Published in:Journal of regional science 1987-11, Vol.27 (4), p.605-620
Main Authors: Hoehn, John P., Berger, Mark C., Blomquist, Glenn C.
Format: Article
Language:English
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Summary:ABSTRACT This paper develops a general multimarket hedonic model appropriate for a national, interregional study of wages, housing prices, and location‐specific amenities. The model encompasses the effects of interregional location, intraurban location, and city size. Typically, hedonic studies focus on a single market such as labor or housing and ignore interactions implicit in a more global compensation mechanism. Examination of the comparative statics of our model indicates that single‐market differentials are partial prices and are unreliable measures of amenity values in an interregional context. Unbiased amenity values are estimated for a comprehensive set of amenities using data on housing prices for 34,414 households and wages for 46,004 workers from the 1980 Census of Population and Housing. Statistically significant differences in housing prices and wages are found due to amenities.
ISSN:0022-4146
1467-9787
DOI:10.1111/j.1467-9787.1987.tb01184.x