Hedonic pricing determines the internal and external factors and characteristics that affect the price of goods in the market.
Hedonic pricing is most commonly seen in the housing market, as real estate prices are determined by the characteristics of the property itself, as well as the area or environment in which it exists.
Hedonic pricing reflects the consumer’s willingness to pay for what they perceive to be differences in the environment that increase or decrease the intrinsic value of an asset or property.