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Modelling a hedonic index for commercial properties in Berlin

Author

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  • Philipp Deschermeier
  • Michael Voigtländer
  • Björn Seipelt

Abstract

Commercial properties play a central role in economics. They are the most important real estate investment class for institutional investors, even more important than the housing market. On the other hand corporations and self-employed people consider commercial properties as input factors, for which especially the quality and costs matter. Despite the fact, that estate agents, consulting firms and banks publish market reports on a regular basis, the commercial properties market lacks behind other investment markets in terms of transparency and data availability, as these reports only monitor very small fragments of the market.On this account the paper aims at developing a hedonic rental price index for commercial properties using supply data for the case of Berlin. The index will be divided in 2 subcategories for office and retail. The data was provided by “Immobilien Scout 24”, a German internet platform. To find a suitable method for constructing an index, the time dummy method is compared to the hedonic imputation method. Our approach focuses on geospatial variables to improve the hedonic functions.

Suggested Citation

  • Philipp Deschermeier & Michael Voigtländer & Björn Seipelt, 2014. "Modelling a hedonic index for commercial properties in Berlin," ERES eres2014_216, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2014_216
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    References listed on IDEAS

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    2. Harry Cominos & Alicia Rambaldi & D.S. Prasada Rao, 2007. "Hedonic Imputed Housing Price Indices from a Model with Dynamic Shadow Prices Incorporating Nearest Neighbour Information," CEPA Working Papers Series WP012007, School of Economics, University of Queensland, Australia.
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    4. Brachinger, Hans Wolfgang, 2002. "Statistical Theory of Hedonic Price Indices," DQE Working Papers 1, Department of Quantitative Economics, University of Freiburg/Fribourg Switzerland, revised Aug 2003.
    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..
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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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