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Alternative Approaches to Measuring House Price Inflation

Walter Diewert

Economics working papers from Vancouver School of Economics

Abstract: The paper uses data on sales of detached houses in a small Dutch town over 14 quarters starting at the first quarter of 2005 in order to compare various methods for constructing a house price index over this period. Four classes of methods are considered: (i) stratification techniques plus normal index number theory; (ii) time dummy hedonic regression models; (iii) hedonic imputation techniques and (iv) additive in land and structures hedonic regression models. The last approach is used in order to decompose the price of a house into land and structure components and it relies on the imposition of some monotonicity constraints or exogenous information on price movements for structures. The problems associated with constructing an index for the stock of houses using information on the sales of houses are also considered.

Keywords: Property price indexes; hedonic regressions; stratification techniques; rolling year indexes; Fisher ideal indexes (search for similar items in EconPapers)
JEL-codes: C2 C23 C43 D12 E31 R21 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2011-01-07, Revised 2011-01-07
New Economics Papers: this item is included in nep-ecm and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ubc:bricol:erwin_diewert-2011-1

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