Description: Hedonic pricing is a method used to estimate the value of a good or service by breaking it down into its constituent attributes. This approach is based on the premise that the price of a product not only reflects its production cost but also incorporates the value that consumers assign to its specific features. For example, in the case of a car, the price may be influenced by attributes such as brand, design, fuel efficiency, safety, and technological features. By analyzing these elements, one can determine how each contributes to the total price of the vehicle. This method is particularly useful in markets where products are heterogeneous and consumers have varied preferences. Hedonic pricing allows economists and market analysts to better understand how changes in product characteristics can affect perceived value and, consequently, market price. Additionally, this approach is used in public policy evaluation, such as in the case of valuing environmental quality or preserving green spaces, where the aim is to quantify the impact of environmental attributes on citizens’ well-being.
