Estimating time, age and vintage effects in housing prices

N. Edward Coulson () and Daniel McMillen

Journal of Housing Economics, 2008, vol. 17, issue 2, pages 138-151

Abstract: The simultaneous estimation of vintage, age and time of sale effects in hedonic models is generally thought to be impossible without some restriction on functional form. This is not the case. We extend and employ the method of McKenzie (McKenzie, D., 2006. Disentangling age, cohort and time effects in the additive model. Oxford Bulletin of Economics and Statistics, 68, 473-495) to estimate additive, but otherwise unrestricted nonparametric hedonic effects of these three temporal variables for a large sample of transactions from Chicago. We compare these to standard treatments of these three variables in hedonic models, and also test for the restrictions that would be implied by linear and quadratic temporal effects, which are all strongly rejected.

Date: 2008

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