Measuring The Value Of Product Characteristics In The Presence of Price Dispersion

Damian Ward

doi:10.1002/mde.2693

Measuring The Value Of Product Characteristics In The Presence of Price Dispersion

Damian Ward

Hertfordshire Business School

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

53 Downloads (Pure)

Abstract

Modeling the price of multi-attribute products generally requires an assessment of eachattributes’ market value. In the presence of price dispersion, when similar products are soldat different prices, hedonic pricing models provide users with biased estimates of attributevalue. This paper develops the hedonic pricing literature by proposing data envelopmentanalysis as a prior means of identifying a sub-sample of products which, after adjustingfor attribute provision, display no price dispersion. These products then display a homoge-nous link between attributes and price, which can be modeled using hedonic pricing. Thispaper implements and evaluates this two-stage approach using 1000 observations fromthe UK mortgage market.

Original language	English
Pages (from-to)	535-544
Number of pages	10
Journal	Managerial And Decision Economics
Volume	36
Issue number	8
Early online date	30 Sept 2014
DOIs	https://doi.org/10.1002/mde.2693
Publication status	Published - 4 Nov 2015

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abstract = "Modeling the price of multi-attribute products generally requires an assessment of eachattributes{\textquoteright} market value. In the presence of price dispersion, when similar products are soldat different prices, hedonic pricing models provide users with biased estimates of attributevalue. This paper develops the hedonic pricing literature by proposing data envelopmentanalysis as a prior means of identifying a sub-sample of products which, after adjustingfor attribute provision, display no price dispersion. These products then display a homoge-nous link between attributes and price, which can be modeled using hedonic pricing. Thispaper implements and evaluates this two-stage approach using 1000 observations fromthe UK mortgage market. ",

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Measuring The Value Of Product Characteristics In The Presence of Price Dispersion

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