Age, Time, Vintage, and Price Indexes: Measuring the Depreciation Pattern of Houses

Iqbal Syed () and Jan de Haan ()
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Jan de Haan: Statistics Netherlands and Delft University of Technology, The Netherlands

No 2016-01, Discussion Papers from School of Economics, The University of New South Wales

Abstract: Age, time and vintage are key determinants of house prices, yet they cannot be included together linearly or as dichotomous variables in hedonic regressions as construction time + age of house = sale time. We introduce a method where the estimates of the age, time and vintage effects on prices are obtained in a flexible manner, without requiring us to specify a pre-determined functional form for either of these variables. Applying our method to Dutch data, we find that the estimated depreciation pattern over the life of houses does not follow the functional forms typically specified for the age of houses in hedonic regressions.

Keywords: Age-price profile; capital formation; hedonic regressions; GEKS index (search for similar items in EconPapers)
JEL-codes: C43 E01 E31 R31 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2016-02
New Economics Papers: this item is included in nep-mac and nep-ure
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http://research.economics.unsw.edu.au/RePEc/papers/2016-01.pdf (application/pdf)

Related works:
Journal Article: AGE, TIME, VINTAGE, AND PRICE INDEXES: MEASURING THE DEPRECIATION PATTERN OF HOUSES (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:swe:wpaper:2016-01

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