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Thanks to its expense, durability, and geographic immobility, housing operates differently than other commodities in the market

Economics

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Thanks to its expense, durability, and geographic immobility, housing operates differently than other commodities in the market. Estimating the economic value of housing, therefore, is difficult, and there are a wide variety of methods used to estimate a home's value. While real-estate agents, insurers, tax assessors, lenders, and others have their own reasonable methods for estimating the value of a property, many economists prefer the method of hedonic price modeling. On what basic idea is hedonic modeling based? Group of answer choices Pick one

A. average price received for comparable homes recently sold in the same neighborhood

B. the construction cost of rebuilding the existing home if it were destroyed by fire or other event resulting in a total loss

C. actual price of the home when it was last sold, adjusted upwards (or downwards) to reflect the amount of inflation (or deflation) that has transpired since that sales date

D. the construction cost of building a similar home on a vacant lot

E. sum of values of a home's various features and amenities (e.g., number of bathrooms, size of garage, swimming pool) as estimated with a multivariate statistical regression