PSY 2113
Prof. McKinzie
Unit 2 Bonus
Part 1: Economists quantify, assess and adjust for qualitative changes in goods and services over time through the use of hedonic regression. Hedonic regression is a method of estimating demand or value. Hedonic regression is the simplification of items being investigated into their own basic characteristics. Hedonic also gathers estimates of the items value for each those features or characteristics. Hedonic is commonly used in the appraisal of real estates and CPI calculations. For example, In Consumer product index calculations hedonic regression is used to control the effect of changes in product quality. Price changes on products and merchandise are all subject to hedonic quality adjustments.