There are two parts to performing hedonic regression analysis.
To begin with, it is necessary to determine the cost of the object, taking into account the characteristics of ownership, as well as external factors. Here you need to determine the relationship between the price of the object and the independent variables (which are the characteristics, including the property’s features, the location features, and the environmental features).
Further, price fluctuations occurring due to changes in characteristics will be a hedonic price. This price is the additional value of the asset based on the additional benefit that depends on the merits of the property.
The model of analyzing the willingness of customers to pay, taking into account their income, preferences and opportunities, is the final part of the hedonic pricing. At this stage, it is determined whether there will be a deal or not. It also depends not only on the family which acquires the property, but also on the property itself: area, renovation, location, and so on.