Econometrica: Jan 1974, Volume 42, Issue 1
Quality, Commodity Hierarchies, and Housing Markets
James L. SweeneyThis paper presents an axiomatic characterization of commodities for which the consumer faces a choice of quality rather than a choice of quantity. Properties of individual and market demand functions for commodities of differing quality levels are derived. Properties of comparative static price changes in response to supply changes at one or more quality levels are also developed. The analysis is then applied to price changes in housing markets.
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