The term hedonic model broadly refers to a class of property-specific AVMs that examine housing characteristics (both physical and locational) to estimate a subject’s market value. These models operate under the assumption that a house is a composite good comprising many traits that appeal to consumers in varying degrees. Through the application of direct market and comparable sales analyses, hedonic AVMs attempt to quantify the extent to which certain attributes contribute to a property’s overall value, and then develop value conclusions based on these findings.
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