The two primary approaches to estimate marginal willingness-to-pay (MWTP) are hedonic (Rosen, 1974) and discrete choice models (McFadden, 1974). This paper provides a tractable framework to investigate the relationship between MWTP in these models. By deriving the hedonic price gradient implicitly from the share function in the discrete choice model, I present an analytical mapping between the ...

Price of Anarchy measures the welfare loss caused by selfish behavior: it is defined as the ratio of the social welfare in a socially optimal outcome and in a worst Nash equilibrium. A similar measure can be derived for other classes of stable outcomes. In this paper, we argue that Pareto optimality can be seen as a notion of stability, and introduce the concept of Price of Pareto Optimality: t...

Air pollution from motor vehicles, electricity-generating plants, industry, and other sources can harm human health, injure crops and forests, damage building materials, and impair visibility. Economists sometimes analyze the social cost of these impacts, in order to illuminate tradeoffs, compare alternatives, and promote efficient use of scarce resource. In this paper, we compare estimates of ...

The two primary approaches to estimate marginal willingness-to-pay (MWTP) are hedonic (Rosen, 1974) and discrete choice models (McFadden, 1974). This paper provides a tractable framework to investigate the relationship between MWTP in these models. By deriving the hedonic price gradient implicitly from the share function in the discrete choice model, I present an analytical mapping between the ...

The inclusion of spatial correlation of house price in hedonic pricing model may produce better marginal implicit price estimate(s) of the environmental variable(s) of interest. Most applications where a spatial econometric model is applied to the estimation of a hedonic property value model have used either a spatial lag model or a spatial autoregressive (SAR) error model. Incorrect spatial sp...