Hedonic housing values in a transition economy: the case of Tashkent

Purpose - This paper aims to scrutinize the value of houses explained by their location in Central Asia’s largest city – Tashkent, the capital of Uzbekistan. The city was completely rebuilt after a devastating earthquake of 1961 and since the country was under the centrally planned regime, houses followed a common standard and style. This allows minimizing the error from omitting possible intrinsic characteristics in a hedonic model, while measuring the impact of location on housing values. Design/methodology/approach - This study uses unique data on housing values and characteristics harvested from classified adverts. This study deliberately focused on data between 2013 and 2016, when Uzbekistan was characterized as hesitant in economic reforms. Therefore, residential buildings constructed during the Former Soviet Union dominated all parts of the city in the analysis period. The results are based on the hedonic pricing model. Findings - The results suggest that locational characteristics are relatively more important than intrinsic characteristics. This study finds that proximity to the city center and access to subway stations significantly increase housing values. The opposite is true for the case of proximity to a wastewater treatment plant. Surprisingly, on the contrary to the authors’ expectations access to a park has no economically significant impact on housing values. The results, therefore, call for an integrated approach for city planning. Originality/value - The first and most important contribution of this study to the field of housing economics is that it is the first study done for Uzbekistan, the most populated Central Asian country, and it is a case study for other Central Asian countries. The second contribution of the study is that, after a long and meticulous study, the determinants of housing prices were analyzed by taking into account all possible intrinsic and extrinsic properties of houses with the similar characteristics, over a unique data set created from approximately 18,000 observations from classified pages of a major newspaper published every Thursday in Tashkent City. The final contribution of the study is that it offers new perspectives and policy recommendations to the housing market actors in Uzbekistan.