Does the law of one price hold for hedonic prices?

Abstract

spatial equilibrium values then individuals can benefit from changing locations. I examine whether the law holds for the hedonic price of rail access using a unique historical dataset for Berlin over the period 1890-1914, characterised by massive investment in the transport infrastructure. I estimate the hedonic price of rail access across multiple urban neighbourhoods and time periods to generate a panel dataset of hedonic price differences that I test for stationarity using a panel unit root test. Across multiple specifications I consistently fail to reject the null hypothesis of no unit root and accept the alternative hypothesis that the law holds. My estimates indicate a half-life for convergence to the law of one price that lies between 0.28 and 1.14 years. This result is consistent with spatial equilibrium.

Notice of Violation of IEEE Publication Principles: Research on Urban Land Price Assessment Based on Artificial Neural Network Model

“…Some scholars consider the difference of the influence of the characteristic factors on the land price in the evaluation process, and quantify it, and then introduce the characteristic weight into the calculation model of the fuzzy closeness degree, which significantly improves the price of the object to be appraised. However, in this part of the study, qualitative methods such as AHP and expert scoring are generally used to determine the feature weight, which still has certain subjective randomness [28]. And with the passage of time and space, the influence degree of each influence feature on land price may change, and the feature weight also needs to be adjusted to meet the actual situation.…”

Testing for regional convergence of agricultural land prices

“…A standard approach to analyse the LOP for heterogeneous good is to run a hedonic price regression first to correct for different characteristics (Danzon and Chao, 2000;Verboven, 2005, 2004;Lutz, 2004;Waights, 2014). For our dataset, we consider the following regression model assuming a constant effect of soil quality and a county-specific linear trend:…”

“…Thus, transaction costs should be interpreted in a broader sense and also cover costs related to asymmetric information due to the market structure, such as price agreements among neighbours or unequal access to subsidies, leading to market imperfections (Ciaian and Swinnen, 2006). However, despite of these peculiarities, Waights (2014) emphasizes that the LOP, in general, also applies to real estate prices. This is due to the fact that farmers and capital are mobile.…”

When switching costs cause market power: Rubber processing in Indonesia

“…This section conceptualizes a theoretical model to explain price markdowns due to SCs. It focuses on the interface between suppliers of agricultural outputs (farmers and small‐scale traders) and processors (i.e., the buyers), where the exercise of market power (Kopp & Sexton, 2021) and the violation of the law of one price (LOP) in its weak version (Waights, 2018) is frequently observed. This will be explained by nonzero SCs of suppliers, which are anticipated by buyers in their pricing strategies.…”