Hedonic Pricing Method in Environmental Economics

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What does the price paid for a house depend on according to the text?

Both the quantity/quality of the environmental attribute and socio-economic characteristics of the households

How is net benefits measured for localized changes in amenities?

Change in sales price

What does Rosen's model focus on in terms of residential properties?

Utility function for buyers

Which characteristic is not included in Rosen's model's utility function?

Personal income

How is change in house prices assumed to relate to the characteristics of houses?

Unknown relationship

In Rosen's model, what does 'm' represent in the budget constraint equation?

Income

What factors are considered in determining net benefits for non-localized changes in amenities?

Second-stage demand analysis

What is used to compute net benefits if there are transactions costs associated with moving between properties?

Change in price net of transaction costs

What does the consumer surplus calculation involve according to the text?

Calculating excess benefits received by consumers

What determines the cost of houses according to the text?

A non-linear relationship with house characteristics

Learn about the application of the hedonic pricing method in environmental economics, where the value of environmental characteristics of residential properties is assessed based on price differences. This method helps in determining the willingness to pay for different levels of environmental quality.

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