Identification and stochastic specification in Rosen's hedonic price model

Article Abstract:

Employment of an explicitly specified utility function to calculate the inverse demand functions in S. Rosen's hedonic price model offers substantial insight into the appropriate stochastic specification of the model. Except in special circumstances, inverse demand equations prove to be non-linear in parameters, and cannot be conveniently formulated as regression models. Inverse demand functions and the hedonic price function need to be approximated at the same time in order to gain consistent estimates of the functions' parameters. It is demonstrated that the use of an explicitly stated utility function does not assure identification of the Rosen model parameters.

Analysis, Usage, Supply and demand, Stochastic analysis, Prices, Housing policy

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Optimal housing maintenance under uncertainty

Article Abstract:

An optimal building maintenance policy is developed for a housing complex in which rents are dependent on the quality of the building. It is assumed that building quality can be described by a stochastic process that is influenced by the maintenance policy. Rules are derived for determining when the landlord should rent or sell the building.

Research, Economic aspects, Buildings, Maintenance and repair, Stochastic processes

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