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Hedonic equilibria in housing markets: The case of one-to-one matching

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  • Yinger, John

Abstract

Neighborhood amenities, including public services, vary across locations, and a well-known theorem says that households with a higher marginal willingness to pay (MWTP) for an amenity sort into locations where the amenity is better. A higher MWTP is equivalent to a steeper bid function for the amenity, and the housing price function, which is the envelope of the household bid functions, reflects this sorting process. This paper derives equilibrium expressions for the amenity level as a function of a household’s relative MWTP under the assumption of one-to-one matching between household classes and amenity levels.

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  • Yinger, John, 2015. "Hedonic equilibria in housing markets: The case of one-to-one matching," Journal of Housing Economics, Elsevier, vol. 29(C), pages 1-11.
    • Handle: RePEc:eee:jhouse:v:29:y:2015:i:c:p:1-11
    DOI: 10.1016/j.jhe.2015.05.001
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    1. Yinger, John, 2021. "The price of access to jobs: Bid-function envelopes for commuting costs✰," Journal of Housing Economics, Elsevier, vol. 51(C).

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    More about this item

    Keywords

    Hedonics; Household sorting; Neighborhood amenities;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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