IDEAS home Printed from https://ideas.repec.org/p/cmu/gsiawp/816905155.html
   My bibliography  Save this paper

Estimating Hedonic Equilibrium for Metropolitan Housing Markets with Multiple Household Types

Author

Listed:
  • Luis Quintero

Abstract

This paper provides a new estimation and solution method for a generalized class of sorting hedonic models based on discrete approximations of the distribution of housing quality. Our approach incorporates heterogeneity in preferences and treats quality as latent. Additionally, a housing market is taken as a whole metropolitan area, aggregating aggregating owners and renters and imposing equilibrium restrictions between rental prices and asset values. This model is flexible to different utility specifications and does not require a priori imposed functional forms on the income and value distributions. Finally, the obtained hedonic prices allow us to construct more refined price indices that measure change across time and metropolitan areas. In a first application, we use clustering techniques to learn categorization of households into types using data on age and number of children, and use the preference estimates to contrast preferences for overall quality in each type. The estimated preferences can be used to estimate compensating variations arising from the difference in quality and price across metropolitan areas for each type. Finally, we also consider the presence of children to define household types. We obtain the robust result that households without children have stronger preferences for housing quality conditional on income, which supports the view that children presence further raises the relative desired levels of non-housing consumption.

Suggested Citation

  • Luis Quintero, 2013. "Estimating Hedonic Equilibrium for Metropolitan Housing Markets with Multiple Household Types," GSIA Working Papers 2013-E34, Carnegie Mellon University, Tepper School of Business.
  • Handle: RePEc:cmu:gsiawp:816905155
    as

    Download full text from publisher

    File URL: https://student-3k.tepper.cmu.edu/gsiadoc/wp/2013-E34.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ismir Mulalic & Holger Rasmussen & Jan Rouwendal & Hans Henrik Woltmann, 2017. "The Financial Crisis and Diverging House Prices: Evidence from the Copenhagen Metropolitan Area," Tinbergen Institute Discussion Papers 17-084/VIII, Tinbergen Institute.
    2. Piazzesi, M. & Schneider, M., 2016. "Housing and Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1547-1640, Elsevier.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cmu:gsiawp:816905155. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Steve Spear (email available below). General contact details of provider: https://www.cmu.edu/tepper .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.