This thesis contains two essays that use state-of-the-art econometric methods
to estimate the implicit prices of various housing and vehicle attributes in hedonic
price analysis. The additive nonparametric regression proposed by Hastie and
Tibshirani (1990) is applied to capture a series of nonlinearities relating prices to their
attributes that cannot be captured by conventional parametric approach. Due to its
additive structure, the additive nonparametric regression retains an important
interpretative feature of the linear model and avoids the drawbacks of a fully
nonparametric design such as slow rates of convergence and the "curse of
dimensionality." The "benchmark" parametric specification for the hedonic price
function is carefully chosen via the estimation of the Box and Cox (1964) and
Wooldridge (1992) transformations. The additive nonparametric model provides
smaller price prediction errors than the benchmark parametric specification in standard
goodness of fit measures.
The first study examines the effects on housing prices of the structural and
environmental attributes using residential sales data from Portland, Oregon. The
overall estimation results verify that most housing attributes that are generally linked
to the perception of quality, such as larger total structure square footage and higher
elevation, have significant positive implicit prices. Attributes that reduce house
quality, such as age of house and distance to environmental amenities, discount the
value of a house. Complex price effects of various housing attributes are revealed by
the additive nonparametric regression.
The second study uses a hedonic price approach to estimate the effects on used
car prices of vehicle emission attributes, such as hydrocarbon and carbon monoxide
emissions, using data from the Vehicle Inspection Program in Portland, Oregon. The
estimation results show that used car value is on average higher for vehicles with
lower hydrocarbon and carbon monoxide emissions, ceteris paribus. This empirical
finding is consistent with recent reports from the U.S. Environmental Protection
Agency, which indicate that used vehicles failing to pass required emission tests face
potentially high repair costs and frequent smog-check requirements. More cylinders
and larger engine size are highly valued. Higher mileage receives relatively little
discount compared to age of vehicle. / Graduation date: 2000
| Identifer | oai:union.ndltd.org:ORGSU/oai:ir.library.oregonstate.edu:1957/33309 |
| Date | 28 April 2000 |
| Creators | Bin, Okmyung |
| Contributors | Polasky, Stephen |
| Source Sets | Oregon State University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis/Dissertation |
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