Title: An Occam's Razor Approach to Hedonic Pricing Theory
Abstract: In the wake of the present criticism of p value as a reliable statistical tool, then most work on implicit pricing using hedonic regression confronts a serious debacle. We argue that since proper interpretation of the set of implicit prices in a hedonic regression determines the utility of a commodity. Therefore, using unreliable instrument is counterproductive and defeats the theory of hedonic pricing. The analysis of the hedonic pricing model is the focus of this study. Hedonic pricing theory explains the value of a differentiated commodity as a function of its composite attributes. An improved model simplifies the decision-making of an economic actor. Empirical analysis was based on the principle of parsimony and plurality of Occam's razor approach using correlation matrix, marginal cost, significance test, Bayesian information criterion and variance inflation factor.
Publication Year: 2017
Publication Date: 2017-12-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 2
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