Construction of a Spatial Housing Price Index by Estimating an Almost Ideal Demand System
AbstractThe aim of this article is to build a spatial housing price index for the Chilean communes (the commune political body similar to a municipality or county). The first step is to recover hedonic prices of three housing attributes by estimating a mixed index model (Bowden, 1992) using a generalized method of moments procedure. Secondly, a censored almost ideal demand system (Deaton and Muellbauer, 1980) is estimated to build expenditures for every commune and to compare them among different spatial units, while maintaining a constant utility level. Using micro data from the 2009 CASEN survey, we show that there are important differences in housing prices among Chilean communes and the axiomatic approach tends to understate spatial index compared to economic approach.
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Bibliographic InfoPaper provided by Universidad Catolica del Norte, Chile, Department of Economics in its series Documentos de Trabajo en Economia y Ciencia Regional with number 11.
Length: 18 pages
Date of creation: May 2011
Date of revision: May 2011
Spatial housing price index; Mixed index; Demand system with censored data; Economic approach;
Other versions of this item:
- Iturra, Victor & Paredes - Araya, Dusan, 2011. "Construction of a Spatial Housing Price Index by Estimating an Almost Ideal Demand System," MPRA Paper 30581, University Library of Munich, Germany.
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
- C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
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