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Advantages And Disadvantages Of Hedonic Pricing. For example the house price may not effectively reflect the demand for clean air based on hedonic price method a type of RP methods if the air pollution level changes little in an area. In particular hedonic advantages have more advantageous influences on perceived benefits than utilitarian advantages and there is an interplay effect between. There are a number of limitations in the use of the hedonic pricing method. This requires that the composite good being valued can be reduced to its constituent parts and the market values of those constituent parts.
Ready is a professor of economics and social sciences at Agricultural University Norway Ås Norway and Mark C. Advantages of the Hedonic Pricing Method. It takes into account both internal and external factors that will affect the decision making of the buyer. The hedonic method has enjoyed wide acceptance in environmental applications as well. Blomquist are professors of economics at the University of Kentucky Lexington KY. Failure to capture the environmental preferences or differences of consumers and their willingness to pay regardless of the differences.
Despite the benefits of the hedonic pricing method it has its disadvantages which includes.
It takes into account both internal and external factors that will affect the decision making of the buyer. Property records are typically very reliable. There are a number of limitations in the use of the hedonic pricing method. It takes into account both internal and external factors that will affect the decision making of the buyer. 2 Economic Analysis and Hedonic Indexes. They also have limitations to grasp.