Estimating Estate-Specific Price-to-Rent Ratios in Shanghai and Shenzhen: A Bayesian Approach

Shawn Ni () and Jie Chen

No 1015, Working Papers from Department of Economics, University of Missouri

Abstract: The price-to-rent ratio, a common yardstick for the value of housing, is difficult to estimatewhen rental properties are poor substitutes of owner-occupied homes. In this study weestimate price-to-rent ratios of residential properties in two major cities in China, where urbanhigh-rises (estates) comprise both rental and owner-occupied units. We conduct Bayesianinference on estate-specific parameters, using information of rental units to elicit priors of theunobserved rents of units sold in the same estate. We find that the price-to-rent ratios tendto be higher for low-end properties. We discuss economic explanations for the phenomenonand the policy implications.

Keywords: Housing price; rents; heterogeneity; Bayesian analysis (search for similar items in EconPapers)
JEL-codes: C11 G00 R21 R31 (search for similar items in EconPapers)
Pages: 37 pgs.
Date: 2010-11-29
New Economics Papers: this item is included in nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://drive.google.com/file/d/1x1lcSZpXWnQ4Q4K_u ... h11/view?usp=sharing (application/pdf)

Related works:
Journal Article: Estimating Estate-Specific Price-to-Rent Ratios in Shanghai and Shenzhen: A Bayesian Approach (2011)
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:umc:wpaper:1015

Access Statistics for this paper

More papers in Working Papers from Department of Economics, University of Missouri Contact information at EDIRC.
Bibliographic data for series maintained by Chao Gu ().