VALUATION OF MARKET RENTAL VALUE OF A PLANNED DORMITORY USING HEDONIC PRICING METHOD: A CASE STUDY OF POLYTECHNIQUE OF STATE FINANCE STAN, INDONESIA

This study determines the attributes that affect the market rental value of dormitories using the Hedonic Pricing Model. The proportional stratified random sampling technique was used to obtain data from 1,292 PKN STAN students in levels 1 to 3, which was analyzed using the SPSS statistical application. Based on the calculation, the dormitory value varies between IDR11,719,521 (RM3,424.82) to IDR15,482,242 (RM4524,41). The determinants that have a significant positive effect on dormitory value are bathroom location, average remittances per month, earnings per month, room size, gender, and origin, while the type of residence attribute has a negative correlation effect. The results of this study will be beneficial inputs for the PKN STAN in determining the market rental value, the quality of buildings and facilities are in accordance with the market preference.

Willingness to Pay in Hedonic Pricing Models

The value of a differentiated product is simply the sum of its parts. This concept is easily observed in housing markets where the price of a home is determined by the underlying bundle of attributes that define it and by the price households are willing to pay for each attribute. These prices are referred to as implicit prices because their value is indirectly revealed through the price of another product (typically a home) and are of interest as they reveal the value of goods, such as nearby public amenities, that would otherwise remain unknown. This concept was first formalized into a tractable theoretical framework by Rosen, and is known as the hedonic pricing method. The two-stage hedonic method requires the researcher to map housing attributes into housing price using an equilibrium price function. Information recovered from the first stage is then used to recover inverse demand functions for nonmarket goods in the second stage, which are required for nonmarginal welfare evaluation. Researchers have rarely implemented the second stage, however, due to limited data availability, specification concerns, and the inability to correct for simultaneity bias between price and quality. As policies increasingly seek to deliver large, nonmarginal changes in public goods, the need to estimate the hedonic second stage is becoming more poignant. Greater effort therefore needs to be made to establish a set of best practices within the second stage, many of which can be developed using methods established in the extensive first-stage literature.

Farmland value in the “Conegliano Valdobbiadene Prosecco Superiore PGDO” area. An application of the Hedonic Pricing method.

In the last 30 years, numerous studies analysed the factors that affect land prices mainly using the Hedonic Pricing method. These studies have shown that many factors can affect land prices (e.g. land and surrounding territory characteristics, accessibility, proximity to urban area, etc.). However, they rarely addressed the analysis of the reliability of the models by comparing the estimated values to the observed one. Attempting to face this problem, our study analysed the land market of the “Conegliano Valdobbiadene Prosecco Superiore PGDO” area. Despite the quite high coefficient of determination (r2 = 0.76) and statistical significance of the model parameters, we found that the percentage absolute deviation between observed and estimated value is higher than 30% in 34% of cases. Our results seem to suggest that future researches should devote particular attention to the analysis of the discrepancies existing between estimated values and market prices in order to support the appraisal activity of professional valuers.

Effects of faith-based attributes on hotel prices: the case of halal services

Purpose For more than 40 years, researchers have examined an exhaustive set of attributes as price determinants in tourism and hospitality. In extending this rich research stream, this study aims to propose and empirically assess a new set of hotel attributes, namely, faith-based attributes that allow tourists to continue following the activities and rituals guided by their religions while on vacation. Design/methodology/approach Using the Bayesian quantile regression for the first time in the field of hotel pricing, the hedonic pricing models examine both internal and external faith-based attributes, namely, halal services, which cater to the needs of Muslim tourists, in a sample of 805 hotels across the top three non-Muslim country destinations (Singapore, Thailand and Japan). Findings By exploring the effects of faith-based (halal) attributes available in hotels located in the biggest cities of the above-mentioned destinations, this study provides evidence for the significant role of faith-based (halal) attributes in determining hospitality prices. Practical implications This study’s findings offer a resource for several implications for tourism and hospitality scholars, practitioners and policymakers, especially within the field of Muslim/halal tourism, to develop action plans and strategies. Originality/value This study is the first to introduce a novel set of faith-based hospitality attributes and empirically assess their impact on hospitality price formation. Additionally, it contributes to the hedonic pricing method by being the first to use the Bayesian quantile regression.

State of the Art of Hedonic Pricing

Hedonic pricing methods have become a staple in the environmental economist’s toolkit for conducting nonmarket valuation. The hedonic pricing method (HPM) is a revealed preference approach used to indirectly infer the value buyers and sellers place on characteristics of a differentiated product. Environmental applications of the HPM are typically focused on housing and labor markets, where the characteristics of interest are local environmental commodities and health risks. Despite the fact that there have been thousands of hedonic pricing studies published, applications of the methodology still often grapple with issues of omitted variable bias, measurement error, sample selection, choice of functional form, effect heterogeneity, and the recovery of policy-relevant welfare estimates. Advances in empirical methodologies, increased quality and quantity of data, and efforts to link empirical results to economic theory will surely further the use of the HPM as an important nonmarket valuation tool.

Socio-Economic and Spatial Characteristics of Wielkopolski National Park: Application of the Hedonic Pricing Method

The study aimed to determine the influence of the proximity of Wielkopolski National Park (WNP) on the value of dwelling units in Mosina municipality. The research was conducted based on 1182 residential property transactions in the period from 2014 to 2018. The input data were subjected to spatial and statistical analysis. The main part of the analysis was performed with the use of the hedonic price method (HPM)—WLS (weighted least squares). The use of statistical tools made it possible to find undeniable evidence that the housing prices are positively related to the presence of Wielkopolski National Park, which has also been confirmed by previous research works conducted in other parts of the world.

Farmer Evaluation of Irrigation Services. Collective or Self-Supplied?

Economic evaluation of farmland is an important issue in the agricultural sector. The aim of this study was to quantify the economic value of land in the farmland area of the Reclamation and Irrigation Board of Capitanata (Apulia region), differentiating by irrigation water service type (collective or self-supplied). The analysis involved a heuristic evaluation using the hedonic pricing method of the sales comparison approach. The data was gathered through a survey on a group of 75 farmers. The results showed higher capitalization values in the case of lands served by self-supplied sources from groundwater. Actually, in the long-term, an enhanced reliability was found for the self-supplied rather than collective services. The findings highlight the importance for collective water associations of differentiating water rights allocations on the basis of a volume guarantee. In future, water user associations of collective services could consider a different water right system along with price discrimination to efficiently allocate the resource among farmers and improve the sustainability of current water management.

Determinants of Wine Prices: A Systematic Literature Review

Wine is a highly differentiated product sold at a wide range of different prices. This article aims to provide a systematic review of the literature written on the determinants of wine prices globally. The article runs a search on the combination of keywords “wine”, “price”, “determinant” in the Web of Science, Scopus, JSTOR, ProQuest, and Science Direct databases. Based on a final set of 46 articles written between 1998 and 2018, results suggest that terroir and quality ratings are the most significant determinants of wine prices, while objective quality and label data also determines wine prices, though to a different extent and with a different sign in some cases. The hedonic pricing method was the most common way of analyzing the relationship between wines prices and their determinants, and results are similar for most regions and varieties. We believe that our results can be useful for researchers, stakeholders, and even for decision-makers in better understanding the factors lying behind wine prices. Journal of Economic Literature (JEL) codes: D12, D40 Q11

Valuation Models for Holiday Rentals’ Daily Rates: Price Composition Based on Booking.com

In recent years, the number of sharing economy accommodations has grown exponentially due to the Internet and peer-to-peer networks, which has made researchers increasingly interested in analysing this new type of lodging. This study sought to develop models that determine the significant variables for the daily price of staying in holiday rentals based on data extracted from Booking.com and other sources. The hedonic pricing method (HPM) was selected to conduct the research as this methodology has been widely used in real estate valuation and hotel daily rate determination; however, the HPM is still rarely used for holiday rentals. The study focused on the city of Seville, where a notable increase in holiday rentals has been observed in recent years. Variables related to the accommodation typology, including location, size and equipment, as well as seasonality, are the most influential factors in the proposed models. These results are of interest to both owners and users of holiday rentals and can help these individuals to determine if the price of a stay is what would commonly be offered in the market under normal circumstances.