Abstract
In a simple two-region model, this article reviews theoretical results in economics on the reliability and biases of hedonic benefit estimates. Major results are: (1) if migration between regions is free and costless, then hedonic estimates yield upper bounds for benefits of environmental improvements, and (2) in special cases such as the small, open case hedonic estimates equal the true benefits. Intertemporal changes in land rents give neither upper nor lower bound estimates except in the small region case.
