A robust estimation of hedonic price models: least absolute deviations estimation

Conventional parametric estimation of the hedonic price models is not robus t to heteroscedastic and/or non-normal error structure. This paper applies least absolute deviations (LAD) estimation as a robust approach to estimati ng the hedonic price models, using the Korea housing markets data. The pape r finds that LAD estimation produces more reasonable results and that it pr oves robust in a situation where other estimation results based on various functional form models produce inaccurate or misleading results.