Spatial price analysis of used construction equipment: The case of excavators

Equipment represents one of the largest input expenditures for the construction sector and other firms. Yet, prices of used construction equipment have not been widely studied in the economic literature. A spatial hedonic price function is specified and estimated for used excavators sold by auction in North America from 1996 to 2006. The results indicate that prices of used excavators differ significantly for various reasons. Controlling for characteristics of the machinery, we find evidence of regional price variation and 'within sale' spatial effects. Prices also vary between auction houses themselves.