Tips for Doing Price-Benefit Analysis

The method that underpins this book’s research is price-benefit analysis, a technique that uses tools and techniques that I have developed over many years. These methods are based on what economists call hedonic price regression—a statistical tool to compute a price-benefit equation that predicts which product characteristics drive prices in a given marketplace. Creating price-benefit maps and estimating price-benefit equations with statistical tools requires many judgments and can be done for many purposes. This appendix offers a more detailed exploration of the price-benefit methods and approaches used to illustrate the cases in the main text of the book. Considerable detail and rigor lies behind ...

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