Revisiting the Past: Revision in Repeat Sales and Hedonic Indexes of House Prices

Eric Clapham, Peter Englund, John Quigley and Christian L. Redfearn

No 8594, Working Paper from USC Lusk Center for Real Estate

Abstract: This paper examines index revision in measuring the prices for owner-occupied housing. We consider the context of equityinsurance and the settlement of futures contracts. In addition to other desirable characteristics for aggregate price indexes, their usefulness in these contexts requires stability as they are revised. Methods that are subject to substantial or complex revision raise questions about the viability of derivatives markets. We find that revision is an inherent feature of indexes, but also that the commonly used indexes are not equally exposed to volatility in revision. Hedonic indexes appear to be substantially more stable than repeat-sales indexes and are less prone to substantialrevision in the light of new information. We analyze alternative settlement procedures and contracts to mitigate the impact of revision associated with repeat sale indexes.

Keywords: Hedonic Estimators; Homeownership; Price indexes (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://lusk.usc.edu/sites/default/files/working_papers/wp_2004-1011.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:luk:wpaper:8594

Access Statistics for this paper

More papers in Working Paper from USC Lusk Center for Real Estate Contact information at EDIRC.
Bibliographic data for series maintained by Chris Steins ().