Imagine you are doing a hedonic analysis of different types of pollution and hou

Question

Imagine you are doing a hedonic analysis of different types of pollution and housing values. You have the following equation:

Housing Value = B0 + B1 Rooms + B2 Distance to the city center + B3 Age of the housing unit + B4 Lot Size + B5 Traffic Noise + B6 Concentrations of PM5 + B7 Construction Size + B8 Baths

Rooms = number of room of the house
Distance to the city center = miles to the city center
Age of housing unit = age in years of the house
Lot size = square footage of the lot where the house is located
Traffic Noise = NEF units of noise
Concentrations of PM5 = amount of PM5 ppm
Construction size = square footage of the construction
Baths = number of baths in the house

Where
B0=28,099; B1=78; B2=-51; B3=-27; B4=79; B5=-88; B6=-83; B7=52; B8=38

According to this information if amount of noise decreases by 50 units, what would be the change in the value of the house? (if the values of the house increases entere the number as positive if it decreases enter it as negative)

Explanation / Answer

Value of the house by increase by 0.18% or 50 points.

Earlier value of the house = 28099+78-51-27+79-88-83+52+38=28097

After decline in noise house value = 28099+78-51-27+79-38-83+52+38=28147

Change in value = 28147/28097-1 = 0.18%

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