The aim of this summer school is to provide an introduction to hedonic price analysis, residential location choice and their use in policy evaluation.
Property value hedonics is the workhorse model for valuation of local public goods and urban amenities. The recent literature has emphasized the importance of controlling for omitted variables and connected hedonic price analysis with the project evaluation literature that focuses on measurement of causal effects.
The hedonic price function describes a price equilibrium on a market for a heterogeneous commodity, without describing the underlying forces of demand and supply. Models of residential location choice provide a structural description of the market which opens up the possibility for doping counterfactual (policy) analysis. The recent literature has demonstrated that household location choices are not only affected by the accessibility to employment opportunities but also by accessibility to urban amenities.
In this three-day program students will receive an introduction to current practice in using hedonic price analysis and residential sorting models. The emphasis will be on empirical work and three tutorials will offer the student the possibility to work with these methods.
The course will examine subjects such as the importance of using ‘fixed effects’ to control for omitted variables, the importance of heterogeneity in the marginal willingness to pay of economic agents for amenities and the significance of household (re)location choices and price adjustments in assessing the impact of, for instance, a change in the public transport network.
After taking this course the student will be able to carry out a hedonic price analysis, assess the importance of heterogeneity in willingness to pay for local amenities and to set up and estimate a horizontal (logit-based) residential sorting model. Since sorting models are not easy to estimate using standard software (like STATA) the student will be introduced to the use of GAUSS for estimating the horizontal residential sorting model.
The summer school consists of lectures and tutorials. On three working days, there will be 3 lectures of 3 hours in the morning and 3 tutorials of 3 hours in the afternoon. In the tutorial sessions, students have the opportunity to consolidate the material from the lectures. The approach is problem-based. The lectures will introduce the examples and the required programming tools. Tutorials will also provide an introduction to working with GAUSS. At least two weeks prior to the start of the summer school, the student will receive a login name and password to access GAUSS (free of charge). The participants will use their own laptop computers during the lab sessions.
The summer school offers research-oriented teaching by experts in their fields. It seeks to gather current and recent Master students, PhD students, Post-doctoral students, Academics, as well as Professionals. Applicants for this summer course must be at least graduate (Master) students entering their 4th or 5th year. Students from any major are welcome to apply but knowledge of basic micro economics and econometrics (regression analysis and elementary discrete choice modelling) are required. A general interest in the urban economics and an open mind are necessary. Informal assessment and certificates of attendance are issued to each student.