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Property valuation: the hedonic pricing model – location and housing submarkets

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  • Gaetano Lisi

Abstract

Purpose - The purpose of this paper is to comment upon the use of hedonic pricing models for the valuation of property. This model can be particularly useful for some housing markets. Design/methodology/approach - This Education Briefing is an explanation of the how hedonic pricing can be useful in looking at the effect of “location” on the house prices within different submarkets using the Italian real estate market as an example. Findings - Although, this case study is relatively straightforward, it shows how the application of the market approach can provide insights in cases where the comparable properties belong to different submarkets with relatively few transactions. Practical implications - In cases of mass appraisals, hedonic pricing models can provide a broad indication of value across submarkets. Originality/value - This paper develops a general framework that connects multiple regression analysis, direct comparison model and submarket binary variables.

Suggested Citation

  • Gaetano Lisi, 2019. "Property valuation: the hedonic pricing model – location and housing submarkets," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 37(6), pages 589-596, August.
    • Handle: RePEc:eme:jpifpp:jpif-07-2019-0093
    DOI: 10.1108/JPIF-07-2019-0093
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    Citations

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    Cited by:

    1. Hamidreza Rabiei-Dastjerdi & Gavin McArdle, 2021. "Novel Exploratory Spatiotemporal Analysis to Identify Sociospatial Patterns at Small Areas Using Property Transaction Data in Dublin," Land, MDPI, vol. 10(6), pages 1-16, May.
    2. Wei-Ling Tsou & Chen-Yi Sun, 2021. "Consumers’ Choice between Real Estate Investment and Consumption: A Case Study in Taiwan," Sustainability, MDPI, vol. 13(21), pages 1-13, October.
    3. Usman Hamza & Lizam Mohd & Burhan Burhaida, 2021. "A Priori Spatial Segmentation of Commercial Property Market using Hedonic Price Modelling," Real Estate Management and Valuation, Sciendo, vol. 29(2), pages 16-28, June.
    4. Tsai, I-Chun & Chiang, Ying-Hui & Lin, Shih-Yuan, 2022. "Effect of COVID-19 lockdowns on city-center and suburban housing markets: Evidence from Hangzhou, China," Journal of Asian Economics, Elsevier, vol. 83(C).
    5. Yue Ying & Mila Koeva & Monika Kuffer & Kwabena Obeng Asiama & Xia Li & Jaap Zevenbergen, 2020. "Making the Third Dimension (3D) Explicit in Hedonic Price Modelling: A Case Study of Xi’an, China," Land, MDPI, vol. 10(1), pages 1-26, December.

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