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Investments glossary

Hedonic Pricing


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Quotes of the day:

Doctors pour drugs of which they know little, to cure diseases of which they know less, into patients of whom they know nothing.

— Moliere

Hedonic pricing is a model that identifies price factors according to the premise that price is determined both by internal characteristics of the good being sold and external factors affecting it. A hedonic pricing model is often used to estimate quantitative values for environmental or ecosystem services that directly affect market prices for homes. This method of valuation can require a strong degree of statistical expertise and model specification, following a period of data collection.

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