The following hedonic equation incorporates five attributes: dwelling size, job access, school quality, air quality, and crime: V = P, · B+ P,• J +P3•S+Pa · A + Pc·C P, is the price of component J, B is the number of bedrooms, J is the distance to a concentration of jobs, S is the average test score of local schools, A is a measure of air quality, and C is the neighborhood crime rate. Which of the following is true? a. All Ps are positive b. Ps for {B, S, A, J} are positive, and Ps for {C} are negative. c. Ps for {B, S, A} are positive, and Ps for {J, C} are negative. d. Ps for {B, J, S} are positive and Ps for {A, C} are negative.

The following hedonic equation incorporates five attributes: dwelling size, job access, school quality, air quality, and crime: V = P, · B+ P,• J +P3•S+Pa · A + Pc·C P, is the price of component J, B is the number of bedrooms, J is the distance to a concentration of jobs, S is the average test score of local schools, A is a measure of air quality, and C is the neighborhood crime rate. Which of the following is true? a. All Ps are positive b. Ps for {B, S, A, J} are positive, and Ps for {C} are negative. c. Ps for {B, S, A} are positive, and Ps for {J, C} are negative. d. Ps for {B, J, S} are positive and Ps for {A, C} are negative.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter32: The Land Market And Natural Resources

Section: Chapter Questions

Problem 10E

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Question

The following hedonic equation incorporates five attributes: dwelling size, job access,
school quality, air quality, and crime:
V = P, · B+P,• J +Ps• S +Px • A + Pc· C
P; is the price of component J, B is the number of bedrooms, J is the distance to a
concentration of jobs, S is the average test score of local schools, A is a measure of air
quality, and C is the neighborhood crime rate. Which of the following is true?
a. All Ps are positive
b. Ps for {B, S, A, J} are positive, and Ps for {C} are negative.
c. Ps for {B, S, A} are positive, and Ps for {J, C} are negative.
d. Ps for {B, J, S} are positive and Ps for {A, C} are negative.

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