Property Price Index Theory and Estimation: A Survey

Chihiro Shimizu and Koji Karato

No 34, HIT-REFINED Working Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: Property has the particularity of being a non-homogeneous good, and based on this, it is necessary to perform quality adjustment when estimating property price indexes. Various methods of quality adjustment have been proposed and applied, such as the hedonic method often used in price statistics and, due to the fact that the information that can be used in estimation is limited, the repeat sales price method, methods using property appraisal price information, and so forth. However, since there is a lack of theoretical knowledge and data restrictions, it is no exaggeration to say that it is difficult to evaluate their practical application in the present situation. Therefore, focusing on the hedonic method that has been proposed as a quality adjustment method for property price indexes, in addition to repeat sales price indexes and indexes employing property appraisal prices, this paper aimed to outline the underlying econometric theory and clarify the advantages and disadvantages of the respective estimation methods.

Keywords: Hedonic price index; Repeat sales price index; Age effect; Hybrid method; Property appraisal price method; SPAR (search for similar items in EconPapers)
JEL-codes: C2 C23 C43 D12 E31 R21 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016-02
New Economics Papers: this item is included in nep-ecm and nep-mac
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