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Combining Revealed and Stated Preference Data to Estimate Preferences for Residential Amenities: A GMM Approach
- Land Economics
- University of Wisconsin Press
- Volume 89, Number 1, February 2013
- pp. 30-52
- Article
- Additional Information
- Purchase/rental options available:
We show how stated preference information obtained from a choice experiment, and revealed preference information based on housing market transactions, can be combined via generalized method of moments (GMM) estimation. Specifically, we use a moment condition matching the predicted marginal willingness to pay (WTP) from a first-stage hedonic model to the marginal WTP formula implied by the choice experiment utility function. This is coupled with other moments from the choice experiment to produce GMM-based estimates of parameters that reflect the strengths of each data source. Our application values remediation of a contaminated site in Buffalo, New York, and we find evidence in support of estimates arising from our approach. (JEL Q51, Q53)