Hedonic prices and collinearity: An empirical comparison of statistical and neuronal solutions

Hedonic prices and collinearity: An empirical comparison of statistical and neuronal solutions

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Article ID: iaor20063424
Country: Spain
Volume: 5
Issue: 1
Start Page Number: 61
End Page Number: 76
Publication Date: May 2000
Journal: Fuzzy Economic Review
Authors:
Keywords: fuzzy sets
Abstract:

The hedonic price method is well adapted to the calculation of relative prices and the estimation of the quality price relationship for a complex product. The main weakness lies in the use of multiple regression for the evaluation of the coefficients when there are very few data and the variables are correlated. In this article, various methods, statistical and neuronal, are compared from both the predictive capacity point of view as well as that of the facial validity of the expected results. The neuronal approach is globally more successful than PLS regression but neither of the two methods leads to an acceptable solution to the problems of interpretation of the coefficients (signs and values) stemming from collinearity.

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