Real estate appraisals, hedonic models and the measurement of house price dispersion

Gaetano Lisi and Mauro Iacobini

Journal of Economics and Econometrics, 2013, vol. 56, issue 1, 61-73

Abstract: This paper aims to provide a simple method for measuring the price dispersion in the housing market controlling for the differences in attributes or qualities of the residential real estate units. Precisely, the paper proposes an extended hedonic pricing model which incorporates standard market situations (where a better good is sold at a higher price) as well as non-standard market situations (in which the opposite is true). The extended model is able to take into account the variance in house prices which can not be attributed to the heterogeneous nature of real estate goods. The main result of this analysis is that the extended model explains a greater proportion of the variability of selling price, thus giving an important contribution for the application of the hedonic method to the real estate appraisals.

Keywords: Housing price dispersion; residual price volatility; hedonic pricing models. (search for similar items in EconPapers)
JEL-codes: C51 C78 D83 E30 R31 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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