Alternative Approaches to Measuring House Price Inflation
AbstractThe paper uses data on sales of detached houses in a small Dutch town over 14 quarters starting at the first quarter of 2005 in order to compare various methods for constructing a house price index over this period. Four classes of methods are considered: (i) stratification techniques plus normal index number theory; (ii) time dummy hedonic regression models; (iii) hedonic imputation techniques and (iv) additive in land and structures hedonic regression models. The last approach is used in order to decompose the price of a house into land and structure components and it relies on the imposition of some monotonicity constraints or exogenous information on price movements for structures. The problems associated with constructing an index for the stock of houses using information on the sales of houses are also considered.
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Bibliographic InfoPaper provided by UBC Department of Economics in its series UBC Departmental Archives with number erwin_diewert-2011-1.
Length: 49 pages
Date of creation: 07 Jan 2011
Date of revision: 07 Jan 2011
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Property price indexes; hedonic regressions; stratification techniques; rolling year indexes; Fisher ideal indexes;
Find related papers by JEL classification:
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- 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-2011-01-16 (All new papers)
- NEP-ECM-2011-01-16 (Econometrics)
- NEP-URE-2011-01-16 (Urban & Real Estate Economics)
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