Advanced Search
MyIDEAS: Login

The Market Valuation of Interior Design and Developer Strategies: A Simple Theory and Some Evidence

Contents:

Author Info

  • Charles Ka Yui LEUNG

    ()
    (Department of Economics and Finance, City University of Hong Kong)

  • Wai Yip MA

    (Chinese University of Hong Kong)

  • Jun ZHANG

    (Chinese University of Hong Kong)

Abstract

How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? By following recent research based on the ¡§graph theory,¡¨ this paper confirms the importance of internal design variables in a hedonic pricing model, which is applied to a large dataset of high-rise apartment buildings in Asia. The evidence is consistent with a simple theory in that developers strategically use interior design to ¡§dilute¡¨ the effect of location, which leads to a form of endogenous multicollinearity. Directions for future research are also discussed.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.umac.mo/fba/irer/papers/current/vol17n1_pdf/04.pdf
File Function: Full text
Download Restriction: no

Bibliographic Info

Article provided by Asian Real Estate Society in its journal International Real Estate Review.

Volume (Year): 17 (2014)
Issue (Month): 1 ()
Pages: 63-107

as in new window
Handle: RePEc:ire:issued:v:17:n:01:2014:p:63-107

Contact details of provider:
Postal: Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
Email:
Web page: http://www.asres.org/

Order Information:
Postal: Asian Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
Email:
Web: http://www.asres.org/

Related research

Keywords: Endogenous Multicollinearity; Interior Design; Market Valuation; Dummy Variables; Interaction Terms;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Kerry D. Vandell & Jonathan S. Lane, 1989. "The Economics of Architecture and Urban Design: Some Preliminary Findings," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 235-260.
  2. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
  3. Eric A. Hanushek & Kuzey Yilmaz, 2007. "Schools and Location: Tiebout, Alonso, and Government Policy," NBER Working Papers 12960, National Bureau of Economic Research, Inc.
  4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
  5. George H. Lentz & Ko Wang, 1998. "Residential Appraisal and the Lending Process: A Survey of Issues," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 11-40.
  6. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
  7. Bowes, David R. & Ihlanfeldt, Keith R., 2001. "Identifying the Impacts of Rail Transit Stations on Residential Property Values," Journal of Urban Economics, Elsevier, vol. 50(1), pages 1-25, July.
  8. W. Patrick Beaton & Marcus Pollock, 1992. "Economic Impact of Growth Management Policies Surrounding the Chesapeake Bay," Land Economics, University of Wisconsin Press, vol. 68(4), pages 434-453.
  9. Anglin, Paul M & Rutherford, Ronald & Springer, Thomas M, 2003. "The Trade-Off Between the Selling Price of Residential Properties and Time-on-the-Market: The Impact of Price Setting," The Journal of Real Estate Finance and Economics, Springer, vol. 26(1), pages 95-111, January.
  10. Diamond, Peter A, 1984. "Money in Search Equilibrium," Econometrica, Econometric Society, vol. 52(1), pages 1-20, January.
  11. Mok, Henry M K & Chan, Patrick P K & Cho, Yiu-sun, 1995. "A Hedonic Price Model for Private Properties in Hong Kong," The Journal of Real Estate Finance and Economics, Springer, vol. 10(1), pages 37-48, January.
  12. Jon Strand & Mette Vågnes, 2001. "The relationship between property values and railroad proximity: a study based on hedonic prices and real estate brokers' appraisals," Transportation, Springer, vol. 28(2), pages 137-156, May.
  13. Asabere, Paul K & Hachey, George & Grubaugh, Steven, 1989. "Architecture, Historic Zoning, and the Value of Homes," The Journal of Real Estate Finance and Economics, Springer, vol. 2(3), pages 181-95, September.
  14. P. Diamond, 1980. "Aggregate Demand Management in Search Equilibrium," Working papers 268, Massachusetts Institute of Technology (MIT), Department of Economics.
  15. Lawrence J. Christiano & Martin Eichenbaum & David Marshall, 1990. "The permanent income hypothesis revisited," Staff Report 129, Federal Reserve Bank of Minneapolis.
  16. LEUNG, K. Y. Charles & TANG, C. H. Edward, 2011. "Comparing two financial crises: the case of Hong Kong real estate markets," MPRA Paper 31562, University Library of Munich, Germany.
  17. Charles Leung & Youngman Leong & Siu Wong, 2006. "Housing Price Dispersion: An Empirical Investigation," The Journal of Real Estate Finance and Economics, Springer, vol. 32(3), pages 357-385, May.
  18. Charles Ka Yui Leung & Patrick Wai Yin Cheung & Edward Chi Ho Tang, 2013. "Financial Crisis and the Co-movements of Housing Sub-markets: Do relationships change after a crisis?," International Real Estate Review, Asian Real Estate Society, vol. 16(1), pages 68-118.
  19. Diamond, Peter A, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 217-27, April.
  20. Benson, Earl D, et al, 1998. "Pricing Residential Amenities: The Value of a View," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 55-73, January.
  21. 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..
  22. Charles K. Y. Leung & Garion C. K. Lau & Youngman C. F. Leong, 2002. "Testing Alternative Theories of the Property Price-Trading Volume Correlation," Journal of Real Estate Research, American Real Estate Society, vol. 23(3), pages 253-264.
  23. S. B. Kask & S. A. Maani, 1992. "Uncertainty, Information, and Hedonic Pricing," Land Economics, University of Wisconsin Press, vol. 68(2), pages 170-184.
  24. Charles Ka Yui Leung & Kelvin Siu Kei Wong & Patrick Wai Yin Cheung, 2007. "On the Stability of the Implicit Prices of Housing Attributes: A Dynamic Theory and Some Evidence," International Real Estate Review, Asian Real Estate Society, vol. 10(2), pages 66-93.
  25. Archer*, Wayne R. & Gatzlaff+, Dean H. & Ling*, David C., 1996. "Measuring the Importance of Location in House Price Appreciation," Journal of Urban Economics, Elsevier, vol. 40(3), pages 334-353, November.
  26. Mingche M. Li & H. James Brown, 1980. "Micro-Neighborhood Externalities and Hedonic Housing Prices," Land Economics, University of Wisconsin Press, vol. 56(2), pages 125-141.
  27. Carolyn Dehring & Neil Dunse, 2006. "Housing Density and the Effect of Proximity to Public Open Space in Aberdeen, Scotland," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 34(4), pages 553-566, December.
  28. Can, Ayse & Megbolugbe, Isaac, 1997. "Spatial Dependence and House Price Index Construction," The Journal of Real Estate Finance and Economics, Springer, vol. 14(1-2), pages 203-22, Jan.-Marc.
  29. World Bank, 2006. "World Development Indicators 2006," World Bank Publications, The World Bank, number 8151, October.
  30. Charles Ka Yui Leung & Youngman Chun Fai Leong & Ida Yin Sze Chan, 2002. "TOM: Why Isn’t Price Enough?," International Real Estate Review, Asian Real Estate Society, vol. 5(1), pages 91-115.
  31. Anglin, Paul M., 2006. "Value and liquidity under changing market conditions," Journal of Housing Economics, Elsevier, vol. 15(4), pages 293-304, December.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ire:issued:v:17:n:01:2014:p:63-107. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IRER Graduate Assistant/Webmaster).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.