Hedonic Pricing and Spatial Statistics Hedonic Pricing Many goods and services consist of bundles of atomistic goods and services. For example, automobiles differ by the basic characteristics of safety, comfort, and fuel economy.
Computers differ by memory capacity, display resolution, and speed.
Housing differs by accessibility, privacy, cleanliness of the environment, quantity of housing services, and safety. Hedonic pricing attempts to take observations on the overall good or service and obtain implicit prices for the atomistic goods and services. It performs this statistically by regressing the overall price onto the atomistic characteristics. Economists frequently estimate hedonic pricing models using data from the housing or labor markets. Both labor and housing markets have a strong spatial component.