- A 3 000 Square Foot Home Is Cloned So That There Are 5 000 Exact Copies Of This Home A Researcher Then Places These Hom 1 (52.73 KiB) Viewed 28 times
A 3,000-square-foot home is cloned so that there are 5,000 exact copies of this home. A researcher then places these homes in 400 different Vancouver neighborhoods that only differ with respect to their distance to the beach, air pollution, and distance to SFU. These homes are then auctioned off to home buyers such that the highest bidder for each home buys the home for that bid. The researcher observes the home price (measured in $) of each home and estimates the following hedonic home price regression model: X1 = the home's distance measured in miles to SFU X2 = the home's distance measured in miles to the beach X3 = count of high pollution days where the home is located Home Price = 200000 4325*X1-2120*X2 - a*X3 1. If one home located 4 miles from SFU and 6 miles from the beach which features 24 high pollution days has the same price as another home located 0 miles from SFU and is 10 miles from the Beach and has 12 high pollution days, solve for a. 2. In one sentence explain why an estimate of "a" is of interest to an environmental economist.