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Estimating time, age and vintage effects in housing prices

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  • Coulson, N. Edward
  • McMillen, Daniel P.

Abstract

The simultaneous estimation of vintage, age and time of sale effects in hedonic models is generally thought to be impossible without some restriction on functional form. This is not the case. We extend and employ the method of McKenzie (McKenzie, D., 2006. Disentangling age, cohort and time effects in the additive model. Oxford Bulletin of Economics and Statistics, 68, 473-495) to estimate additive, but otherwise unrestricted nonparametric hedonic effects of these three temporal variables for a large sample of transactions from Chicago. We compare these to standard treatments of these three variables in hedonic models, and also test for the restrictions that would be implied by linear and quadratic temporal effects, which are all strongly rejected.

Suggested Citation

  • Coulson, N. Edward & McMillen, Daniel P., 2008. "Estimating time, age and vintage effects in housing prices," Journal of Housing Economics, Elsevier, vol. 17(2), pages 138-151, June.
  • Handle: RePEc:eee:jhouse:v:17:y:2008:i:2:p:138-151
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    References listed on IDEAS

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    1. Dye, Richard F. & McMillen, Daniel P., 2007. "Teardowns and land values in the Chicago metropolitan area," Journal of Urban Economics, Elsevier, vol. 61(1), pages 45-63, January.
    2. Case, Bradford & Quigley, John M, 1991. "The Dynamics of Real Estate Prices," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 50-58, February.
    3. Cannaday, Roger E. & Munneke, Henry J. & Yang, Tyler T., 2005. "A multivariate repeat-sales model for estimating house price indices," Journal of Urban Economics, Elsevier, vol. 57(2), pages 320-342, March.
    4. G. Sirmans & Lynn MacDonald & David Macpherson & Emily Zietz, 2006. "The Value of Housing Characteristics: A Meta Analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 33(3), pages 215-240, November.
    5. David J. McKenzie, 2006. "Disentangling Age, Cohort and Time Effects in the Additive Model," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 473-495, August.
    6. Bradford Case & Henry O. Pollakowski & Susan M. Wachter, 1991. "On Choosing Among House Price Index Methodologies," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 286-307.
    7. Clapp, John M. & Giaccotto, Carmelo, 1998. "Residential Hedonic Models: A Rational Expectations Approach to Age Effects," Journal of Urban Economics, Elsevier, vol. 44(3), pages 415-437, November.
    8. N. Edward Coulson & Michael L. Lahr, 2005. "Gracing the Land of Elvis and Beale Street: Historic Designation and Property Values in Memphis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 33(3), pages 487-507, September.
    9. Helms, Andrew C., 2003. "Understanding gentrification: an empirical analysis of the determinants of urban housing renovation," Journal of Urban Economics, Elsevier, vol. 54(3), pages 474-498, November.
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    Cited by:

    1. Iqbal A. Syed & Jan De Haan, 2017. "Age, Time, Vintage, And Price Indexes: Measuring The Depreciation Pattern Of Houses," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 580-600, January.
    2. Yan, Sisi & Delmelle, Eric & Duncan, Michael, 2012. "The impact of a new light rail system on single-family property values in Charlotte, North Carolina," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 5(2), pages 60-67.
    3. Yoshida, Jiro, 2016. "Structure Depreciation and the Production of Real Estate Services," HIT-REFINED Working Paper Series 44, Institute of Economic Research, Hitotsubashi University.
    4. Koji Karato & Oleksandr Movshuk & Chihiro Shimizu, 2015. "Semiparametric Model of Hedonic Housing Prices in Japan," Asian Economic Journal, East Asian Economic Association, vol. 29(4), pages 325-345, December.
    5. Jovanovic, Boyan & Yatsenko, Yuri, 2012. "Investment in vintage capital," Journal of Economic Theory, Elsevier, vol. 147(2), pages 551-569.
    6. repec:kap:jrefec:v:56:y:2018:i:2:d:10.1007_s11146-016-9596-6 is not listed on IDEAS

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