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Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables

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  • Chihiro Shimizu

    (Faculty of Economics and Business Administration, Reitaku University, 2-1-1 Hikarigaoka, Kashiwa, Chiba 277-8686, Japan)

Abstract

In the formulation of hedonic models, in addition to locational factors and building structures which affect the house prices, the generation of the omitted variable bias is thought to occur in cases when local environmental variables and the individual characteristics of house buyers are not taken into consideration. However, since it is difficult to obtain local environmental information in a small neighborhood unit and to observe individual characteristics of house buyers, these variables have not been sufficiently considered in previous studies. We demonstrated that non-negligible levels of omitted variable bias are generated if these variables are not considered.

Suggested Citation

  • Chihiro Shimizu, 2014. "Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables," Sustainability, MDPI, vol. 6(5), pages 1-15, May.
    • Handle: RePEc:gam:jsusta:v:6:y:2014:i:5:p:2946-2960:d:36066
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    References listed on IDEAS

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    1. Jackson, Jerry R., 1979. "Intraurban variation in the price of housing," Journal of Urban Economics, Elsevier, vol. 6(4), pages 464-479, October.
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    5. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    6. Chihiro Shimizu & Kiyohiko G. Nishimura & Yasushi Asami, 2004. "Search And Vacancy Costs In The Tokyo Housing Market: Attempt To Measure Social Costs Of Imperfect Information," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 16(3), pages 210-230, November.
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    9. Chihiro Shimizu & Kiyohiko Nishimura, 2007. "Pricing Structure in Tokyo Metropolitan Land Markets and its Structural Changes: Pre-bubble, Bubble, and Post-bubble Periods," The Journal of Real Estate Finance and Economics, Springer, vol. 35(4), pages 475-496, November.
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    Cited by:

    1. Xu Zhang & Xiaoxing Liu & Jianqin Hang & Dengbao Yao & Guangping Shi, 2016. "Do Urban Rail Transit Facilities Affect Housing Prices? Evidence from China," Sustainability, MDPI, vol. 8(4), pages 1-14, April.
    2. Celia Bilbao-Terol & Verónica Cañal-Fernández & Luis Valdés & Eduardo Del Valle, 2017. "Rural Tourism Accommodation Prices by Land Use-Based Hedonic Approach: First Results from the Case Study of the Self-Catering Cottages in Asturias," Sustainability, MDPI, vol. 9(10), pages 1-17, September.
    3. Natividad Guadalajara & Miguel Ángel López & Adina Iftimi & Antonio Usai, 2021. "Influence of the Cadastral Value of the Urban Land and Neighborhood Characteristics on the Mean House Mortgage Appraisal," Land, MDPI, vol. 10(3), pages 1-17, March.
    4. Biao Sun & Shan Yang, 2020. "Asymmetric and Spatial Non-Stationary Effects of Particulate Air Pollution on Urban Housing Prices in Chinese Cities," IJERPH, MDPI, vol. 17(20), pages 1-23, October.
    5. Sabrina-Sigrid Spiegel, 2022. "Price Indices for Austrian municipalities - Hedonic models based on Microlevel Data," Graz Economics Papers 2022-01, University of Graz, Department of Economics.
    6. Nishi, Hayato & Asami, Yasushi & Shimizu, Chihiro, 2021. "The illusion of a hedonic price function: Nonparametric interpretable segmentation for hedonic inference," Journal of Housing Economics, Elsevier, vol. 52(C).
    7. My-Linh Thi Nguyen, 2020. "The Hedonic Pricing Model Applied to the Housing Market," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 416-428.
    8. Zuo Zhang & Xinhai Lu & Min Zhou & Yan Song & Xiang Luo & Bing Kuang, 2019. "Complex Spatial Morphology of Urban Housing Price Based on Digital Elevation Model: A Case Study of Wuhan City, China," Sustainability, MDPI, vol. 11(2), pages 1-17, January.
    9. Shengfu Yang & Shougeng Hu & Weidong Li & Chuanrong Zhang & José A. Torres, 2017. "Spatiotemporal Effects of Main Impact Factors on Residential Land Price in Major Cities of China," Sustainability, MDPI, vol. 9(11), pages 1-16, November.

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