EI Senior Economist Allison Holt publishes on the estimation of overcharges in price fixing litigation using hedonic price methods.

In her article “Estimating Overcharges Using Hedonic Price Methods” published in the Fall 2008 Issue of ABA Economics Committee Newsletter, Dr. Holt discusses the difficulties of estimating damages in cases where the product allegedly price-fixed is not one homogeneous product over the entire time span of the cartel, but rather a series of products with varying feature sets that jointly span the relevant period. With the hedonic method, damages are estimated using an equation which is specified such that a product’s price is a function of a time interval specific constant plus a linear combination of the products’ features. Dr. Holt has been involved in several cases where hedonic methods have been used to calculate damages.