Use of the Hedonic Method to Calculate an Index of Real Estate Prices in Croatia

Davor Kunovac (), Enes Đozović, Gorana Lukinić () and Andreja Pufnik ()
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Davor Kunovac: The Croatian National Bank, Croatia
Enes Đozović: The Croatian National Bank, Croatia
Gorana Lukinić: The Croatian National Bank, Croatia
Andreja Pufnik: The Croatian National Bank, Croatia

No 19, Working Papers from The Croatian National Bank, Croatia

Abstract: Due to the significant impact that real estate prices may have on overall economic developments, it is necessary to create a reliable index for monitoring the movements of real estate prices. This paper presents the hedonic method, which enables the creation of a real estate price index that in addition to the price takes into account the characteristics of real estate and provides for the estimation of pure change in the price of residential real estate between two points in time. This paper also strives to answer several interesting questions such as: has the sharp increase of real estate prices resulted in the purchase of smaller dwellings, how has the growth of real estate prices affected real demand for housing loans and can databases containing the asking prices of real estate be used to create a reliable real estate price index? This paper also indicates the possibility of the estimated regression model being used in the creation of an expert system for assessment of real estate prices of known characteristics.

Keywords: hedonic index; real estate price index; real estate market (search for similar items in EconPapers)
JEL-codes: C43 D11 R31 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2008-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hnb:wpaper:19

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