Alternative Approaches to Commercial Property Price Indexes for Tokyo

Walter Diewert and Chihiro Shimizu

No 8, HIT-REFINED Working Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: The paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts. Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country and related price indexes for the land and structure components of a commercial property are required in the Balance Sheet accounts of the country for the calculation of the Multifactor Productivity of the Commercial Property Industry. The paper uses a variant of the builder’s model that has been used to construct Residential Property Price Indexes. Geometric depreciation rates are estimated for commercial offices in Tokyo using assessment data for REITs. The problems associated with the decomposition of asset value into land and structure components are addressed. The problems associated with depreciating capital expenditures on buildings and with measuring the loss of asset value due to early retirement of the structure are also addressed.

Keywords: Commercial property price indexes; System of National Accounts; Balance Sheets; methods of depreciation; land and structure price indexes; demolition depreciation (search for similar items in EconPapers)
JEL-codes: C2 C23 C43 D12 E31 R21 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-09
New Economics Papers: this item is included in nep-acc, nep-mac and nep-ure
Note: First version: July 12, 2014, This version: Aug 28, 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/26846/wp008.pdf

Related works:
Journal Article: Alternative Approaches to Commercial Property Price Indexes for Tokyo (2017)
Working Paper: Alternative Approaches to Commercial Property Price Indexes for Tokyo (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:remfce:8

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