RT Journal Article
SR Electronic
T1 A Hedonic Price Model to Recover Marginal Willingness to Pay for Product Attributes in the Presence of Market Power
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 051124-0042R
DO 10.3368/le.101.3.051124-0042R
A1 Huang, Ju-Chin
A1 Zhao, Min Qiang
YR 2025
UL http://le.uwpress.org/content/early/2025/02/28/le.101.3.051124-0042R.abstract
AB This study employs a hedonic price framework to estimate consumers’ marginal willingness to pay for product attributes in imperfectly competitive markets. Our approach allows for the joint estimation of both price-cost markups and marginal values of product attributes under the popular semi-log specification, improving both the applicability and reliability of empirical hedonic valuation studies. Applying this new empirical strategy to analyze US lift ticket prices, our results reveal an estimated price-cost ratio between 1 and 2, with pass-sharing arrangements further amplifying this markup. Ignoring market power can bias the hedonic valuation of product attributes.