Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables

Chihiro Shimizu
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Chihiro Shimizu: Faculty of Economics and Business Administration, Reitaku University, 2-1-1 Hikarigaoka, Kashiwa, Chiba 277-8686, Japan

Sustainability, 2014, vol. 6, issue 5, 1-15

Abstract: In the formulation of hedonic models, in addition to locational factors and building structures which affect the house prices, the generation of the omitted variable bias is thought to occur in cases when local environmental variables and the individual characteristics of house buyers are not taken into consideration. However, since it is difficult to obtain local environmental information in a small neighborhood unit and to observe individual characteristics of house buyers, these variables have not been sufficiently considered in previous studies. We demonstrated that non-negligible levels of omitted variable bias are generated if these variables are not considered.

Keywords: hedonic model; identification; omitted variable bias; neighborhood effect; geographic information system (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:6:y:2014:i:5:p:2946-2960:d:36066

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