Rising Inequality of Housing? Evidence from Segmented Housing Price Indices
AbstractThis article uses the Case-Shiller technique for constructing housing price indices on a Norwegian data set of transactions for the period 1991-2002 consisting of 10 376 pairs of repeated sales. Using a weighted least squares scheme in order to control for heteroskedasticity, we construct a general housing price index by regressing differences in log prices for the subset of repeated sales of same, and thus identical, homes onto a set of binary time variables, one for each quarter in the period. The constructed index shows that nominal prices for identical homes in general have increased by a factor of 3.58 over the 11-year period, while the CPI increased by 1.28, creating substantial capital returns for early purchasers. We then segment the data set into five different housing types in order to control for finite mixtures of hedonic features, and find that price indices for the smallest and largest type show nominal increases by factors 4.40 and 2.77, respectively.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 363.
Date of creation: Nov 2003
Date of revision:
distribution; hedonic model; housing price bubble; housing price index; inequality; repeated sales model; segmented housing types;
Find related papers by JEL classification:
- C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-06-02 (All new papers)
- NEP-GEO-2004-06-02 (Economic Geography)
- NEP-MIC-2004-03-14 (Microeconomics)
- NEP-URE-2004-03-14 (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.:
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