How to Better Measure Hedonic Residential Property Price Indexes
November 8, 2016
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Summary
Hedonic regressions are used for property price index measurement to control for changes in the quality-mix of properties transacted. The paper consolidates the hedonic time dummy approach, characteristics approach, and imputation approaches. A practical hedonic methodology is proposed that (i) is weighted at a basic level; (ii) has a new (quasi-) superlative form and thus mitigates substitution bias; (iii) is suitable for sparse data in thin markets; and (iv) only requires the periodic estimation of hedonic regressions for reference periods and is not subject to the vagrancies of misspecification and estimation issues.
Subject: Commodities, Consumer price indexes, Inflation, Land prices, Price indexes, Prices, Silver
Keywords: arithmetic mean, Commercial Property Price Index, Consumer price indexes, Global, hedonic regression, Hedonic Regressions, House Price Index, index number, Inflation, Land prices, price change, price index, Price indexes, reference period, Residential Property Price Index, Silver, Superlative Index Number, Thin Property Markets, WP
Pages:
89
Volume:
2016
DOI:
Issue:
213
Series:
Working Paper No. 2016/213
Stock No:
WPIEA2016213
ISBN:
9781475552249
ISSN:
1018-5941
