An econometric estimate of hedonic price functions: The case of vintage electric guitars

This study investigated the quality characteristics that explain the price of vintage electric guitars. Lancaster's (1971) new consumer theory provided the foundation for formulating the estimated hedonic price functions. A ten year sample of descriptive guitar characteristics was developed for Telecaster, Stratocaster, Les Paul, Semi-Hollow body, and Hollow body vintage electric guitars. Principal Component Analysis was performed to reduce the number of guitar characteristics into three composite variables (guitar body attributes; electronic components; intonation, tuning and playability) representing 16 different individual quality characteristics. All but one of the estimated coefficients of the composite variables was found to be statistically significant (p < .05). Secondary analysis examined (1) the effect on the vintage electric guitar price when a vintage electric guitar is reissued, and (2) the effect of the 10- to 14-year old population on the sales volume of new electric guitar sales. Results suggested reissue electric guitar models had a positive influence on vintage electric guitar prices. The 10- to 14-year old population did not explain the volume of new electric guitar sales.