A Hedonic Approach
Chapter 10: Concluding Remarks
This book attempts to explain the hedonic approach in the context of environmental and public policy evaluation from both theoretical and practical viewpoints, and to extend the role of the hedonic approach from marginal cases to large-scale public projects and environmental changes mainly based upon theoretical and empirical perspectives. The strength of this study, on the theoretical side, is being able to consider explicitly the price changes within the general equilibrium framework and the cost of public and environmental policies. Although it is claimed in the studies discussed from the viewpoint of time-series or comparative statics that the beneﬁts of the projects should be incorporated into wages, it is shown, in our book, that the hedonic measure based upon cross-sectional capitalization theory can also correctly approximate the beneﬁts in large-scale cases. We hope this book is instrumental in changing the prevailing conception of the limitations of the hedonic approach for beneﬁt estimation, especially with respect to large-scale policies or environmental changes, although the results may have some limitations because of the parameters examined. Thus, we advocate that future evaluation of large-scale environmental projects and public policies should have a local public goods nature (that is, people are able to choose a good) using the hedonic price functions based upon land, housing, commercial, and business market price data. We also emphasize the importance of using comparative studies of hedonic and other beneﬁt estimation methods in different circumstances, which will enable us to support the ﬁndings of this...
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