Zastosowanie zmiennych zastępczych w modelach hedonicznych
The application of proxy variables in hedonic models

Summary/Abstract: A hedonic model that allows to describe the price of good by its significant characteristics has numerous practical applications. However, in order to obtain reliable results an adequate set of independent variables explaining the price of the good must be used in the process of model estimation. In practice, situations in which an important independent variable cannot be included in the model because it is unobservable or directly unmeasurable can arise. It also happens that the introduction of a variable measured on a nominal scale is problematic because of a large set of its values. In such cases, the application of proxy variables in the model should be considered. The aim of the study was to investigate the application of proxy variables in hedonic modelling and to test their effect on the obtained results. The study was conducted using data from selected Polish heterogeneous goods: laptops and used cars.

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