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This article deals with the incidence of consumers’ heterogeneity on the formation of hedonic price functions with a focus on the emergence of market segmentation. Two major points are outlined: (i) in the presence of group-wise heterogeneity, consumers are endogenously gathered on intervals of values of the argument of the hedonic price function, defined as an index of housing services; (ii) the resulting segmentation invalidates the standard two stages estimation method more specifically used to assess the value of local environmental goods. Classification JEL: R31, Q51.