hedonic pricing

Popular Terms
A method of pricing based on the principle that, the price of a marketed good is affected by certain external environmental or perceptual factors that can raise or lower the "base" price of that good. This is commonly applied to the housing market, where the price of a house can be affected by factors such as scenic views, house appearance, and neighborhood demand. The hedonic pricing model is used to estimate the extent that price and demand can be affected by such factors i.e. how much people are willing to pay for that good when considering these factors.


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