How to Better Measure Hedonic Residential Property Price Indexes

Mick Silver

No 2016/213, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; price index; Hedonic Regressions; Residential Property Price Index; Commercial Property Price Index; House Price Index; Superlative Index Number; Thin Property Markets; price change; reference period; hedonic regression; arithmetic mean; index number; Price indexes; Land prices; Inflation; Consumer price indexes; Silver; Global (search for similar items in EconPapers)
Pages: 89
Date: 2016-11-08
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Citations: View citations in EconPapers (33)

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