Location, Location, Location: Extracting Location Value from House Prices
AbstractThe price for a single-family house depends both on the characteristics of the building and on its location. We propose a novel semiparametric method to extract location values from house prices. After splitting house prices into building and land components, location values are estimated with adaptive weight smoothing. The adaptive estimator requires neither strong smoothness assumptions nor local symmetry. We apply the method to house transactions from Berlin, Germany. The estimated surface of location values is highly correlated with expert-based land values and location ratings. The semiparametric method can therefore be used for applications where no other location value information exists or where this information is not reliable.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1216.
Length: 29 p.
Date of creation: 2012
Date of revision:
Location value; adaptive weight smoothing; spatial modeling;
Other versions of this item:
- Jens Kolbe & Rainer Schulz & Martin Wersing & Axel Werwatz, 2012. "Location, location, location: Extracting location value from house prices," SFB 649 Discussion Papers SFB649DP2012-040, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Housing Supply and Markets
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-07-01 (Agricultural Economics)
- NEP-ALL-2012-07-01 (All new papers)
- NEP-GEO-2012-07-01 (Economic Geography)
- NEP-URE-2012-07-01 (Urban & Real Estate Economics)
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.:
- Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens III, 2008.
NBER Working Papers
14369, National Bureau of Economic Research, Inc.
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