of pricing based on the principle
that, the price of a marketed good is affected by certain external environmental or perceptual factors that can raise or lower the "base" price of that good. This is commonly applied to the housing market
, where the price of a house
can be affected by factors such as scenic views, house appearance
, and neighborhood demand
. The hedonic pricing model
is used to estimate
the extent that price and demand can be affected by such factors i.e. how much people are willing to pay for that good when considering these factors.