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The historical development of the Swiss rental market – A new price index

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  • Constantinescu, Mihnea
  • Francke, Marc

Abstract

A new data set is employed to construct an index of the Swiss rental residential market starting as early as 1936. Given the data sample at our disposal of slightly less than 1000 paired data points spread across all Switzerland, we focus on using the most efficient type of repeated-measurement index to evaluate the yearly price development of the rental property market. In the process of building the index, an alternative of the SPAR method (Sale Price Appraisal Ratio) is developed and compared against a structural time series model and the Case–Shiller approach. The newly developed ISPAR (Inverse SPAR) method yields qualitatively similar results to the regression based methodology yet is influenced to a lesser extent by the sample size. The structural time series model is the version least influenced by the sample size. An interesting finding in our sample is that despite the large time span between successive price measurements, no notable improvement is obtained using the 3SLS method of Case–Shiller instead of the traditional Bailey et al. method.

Suggested Citation

  • Constantinescu, Mihnea & Francke, Marc, 2013. "The historical development of the Swiss rental market – A new price index," Journal of Housing Economics, Elsevier, vol. 22(2), pages 135-145.
  • Handle: RePEc:eee:jhouse:v:22:y:2013:i:2:p:135-145
    DOI: 10.1016/j.jhe.2013.02.004
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    2. Stefano Giglio & Matteo Maggiori & Johannes Stroebel & Andreas Weber, 2015. "Climate Change and Long-Run Discount Rates: Evidence from Real Estate," NBER Working Papers 21767, National Bureau of Economic Research, Inc.
    3. Joseph DeSalvo, 2017. "Teaching the DiPasquale-Wheaton Model," Working Papers 0117, University of South Florida, Department of Economics.
    4. Stefano Giglio & Matteo Maggiori & Johannes Stroebel, 2014. "Very long-run discount rates," Globalization Institute Working Papers 182, Federal Reserve Bank of Dallas.

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