University of Hertfordshire

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

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Original languageEnglish
Pages (from-to)535-544
Number of pages10
JournalManagerial And Decision Economics
Early online date30 Sep 2014
Publication statusPublished - 4 Nov 2015


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.


This is the peer reviewed version of the following article: Damian Ward, 'Measuring the Value of Product Characteristics in the Presence of Price Dispersion', Managerial and Decision Economics, Vol. 36 (8): 535-544, December 2015, which has been published in final form at This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.

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