The hedonic pricing method is one of the main approaches used to estimate the economic
value of attributes that affect the market price of an asset. This method is routinely used in
environmental economics to derive the economic valuation of environmental attributes such
as air pollution and water quality. For example, the “Ricardian approach” is based on a
hedonic regression of land values on historical climate variables. Forecasts of future climate
can then be employed to estimate the future costs of climate change. We show that this …