Hedonic Modeling of the Home Selling Process

  • John R. Knight

Many aspects of the housing market distinguish it from a perfectly competitive market. In a perfectly competitive market, a large number of buyers and sellers, together with ease of entry and exit, ensure that all participants are price takers. The marketplace is clearly defined and products in such markets are perfectly homogeneous. Moreover, information about price is easily obtained and instantly known.

A considerable literature has developed over the last several years regarding the selling process sketched above. To date however, hedonic studies of environmental amenities and disamenities have largely ignored the impact of the selling process on selling price and attribute values. This chapter provides a review of the relevant theories that have been offered to explain buyer and seller behavior in this process, describes an econometric model that may be employed to test these theories within the hedonic framework, and highlights some of the important empirical results.


Real Estate Housing Market Reservation Price Selling Price Listing Price 
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© Springer Science + Business Media, LLC 2008

Authors and Affiliations

  • John R. Knight
    • 1
  1. 1.University of the PacificStocktonUS

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