Hedonic analysis is a powerful statistical tool that analyzes the relationship between price and attributes in housing and other markets. One of the most common applications of hedonic analysis is generating price indeces for housing and land. That is, for a given housing market, it can help determine how much an additional bathroom, garage space or square foot of yard is worth. Likewise, it can be used to derive values for land, even in areas where there is no bare land. Increasingly, hedonic analysis is being used to derive price indices for more abstract "non-market goods," such as views, clean air, open space, or proximity to an industrial facility.

SIG's Land Value GIS system integrates hedonic analysis with GIS. By coding for a large number of spatial attributes, Land Value GIS can deliver an extremely accurate model, often accounting for 99% of the variation in housing price for a given market. By specifying all the factors that contribute to a transacted house price and using proven econometric methods to estimate equations, Land Value GIS can:

• Derive extremely accurate measures of land value and map how it changes over space
• Derive mean values (marginal willingness to pay) and economic measures (consumer surplus) for positive amenities, like parks, open space, clean air, public transportation, good schools and public infrastructure
• Estimate individual and aggregate property value reductions due to placement of negative facilities, such as factories, waste sites, power plants, prisons and highways, or due to negative designations, such as floodplains, Superfund or seismic zone designation.
• Measure how positive or negative price effects vary with distance, neighborhood, housing market, income, etc.
  Measure the value of location relative to work opportunities, shopping, night life, etc.