The System of National Accounts and Alternative Approaches to the Construction of Commercial Property Price Indexes

Walter Diewert and Chihiro Shimizu

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: While fluctuations in commercial property prices have an enormous impact on economic systems, the development of related statistics that can capture these fluctuations is one of the areas that is lagging the furthest behind. The reasons for this are that, in comparison to housing, commercial property has a high level of heterogeneity and there are extremely significant data limitations. Focusing on the Tokyo office market, this study estimated commercial property price indexes using the data available in the property market, and clarified discrepancies in commercial property price indexes based on differences in the method used to create them. Specifically, we estimated a quality adjusted price index with the hedonic price method using property appraisal prices and transaction prices. The international System of National Accounts (SNA) requires a decomposition of property values into price and volume (quantity) components for both the structure and land components of property value. The paper shows how this can be accomplished for Commercial properties.

Keywords: Commercial property price indexes; System of National Accounts; the builder’s model; transaction based indexes; appraisal prices; assessment prices (search for similar items in EconPapers)
JEL-codes: C2 C23 C43 D12 E31 R21 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2019-10-15, Revised 2019-10-15
New Economics Papers: this item is included in nep-mac and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Chapter: The System of National Accounts and Alternative Approaches to the Construction of Commercial Property Price Indexes (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:erwin_diewert-2019-12

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