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On nonparametric estimation of a hedonic price function

Author

Listed:
  • Harry Haupt

    (Department of Business Administration and Economics, Bielefeld University, Centre for Statistics, Department of Bielefeld, Germany)

  • Joachim Schnurbus

    (University of Regensburg, Regensburg, Germany)

  • Rolf Tschernig

    (University of Regensburg, Regensburg, Germany)

Abstract

Recently, using mixed data on Canadian housing, Parmeter, Henderson, and Kumbhakar (Journal of Applied Econometrics 2007; 22: 695-699) found that a nonparametric approach for estimating a hedonic house price function is superior to formerly suggested parametric and semiparametric specifications. We carefully reanalyze these specifications for this dataset by applying a recent nonparametric specification test and simulation-based prediction comparisons. For the case at issue our results suggest that a previously proposed parametric specification does not have to be rejected and we illustrate how nonparametric methods provide valuable insights during all modeling steps. Copyright © 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • Harry Haupt & Joachim Schnurbus & Rolf Tschernig, 2010. "On nonparametric estimation of a hedonic price function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 25(5), pages 894-901.
  • Handle: RePEc:jae:japmet:v:25:y:2010:i:5:p:894-901
    DOI: 10.1002/jae.1186
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    References listed on IDEAS

    as
    1. Racine, Jeff & Li, Qi, 2004. "Nonparametric estimation of regression functions with both categorical and continuous data," Journal of Econometrics, Elsevier, vol. 119(1), pages 99-130, March.
    2. Anglin, Paul M & Gencay, Ramazan, 1996. "Semiparametric Estimation of a Hedonic Price Function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 633-648, Nov.-Dec..
    3. Hsiao, Cheng & Li, Qi & Racine, Jeffrey S., 2007. "A consistent model specification test with mixed discrete and continuous data," Journal of Econometrics, Elsevier, vol. 140(2), pages 802-826, October.
    4. Daniel J. Henderson & Christopher F. Parmeter & Subal C. Kumbhakar, 2007. "Nonparametric estimation of a hedonic price function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 695-699.
    5. Qi Li & Jeffrey Scott Racine, 2006. "Nonparametric Econometrics: Theory and Practice," Economics Books, Princeton University Press, edition 1, number 8355.
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    Citations

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    Cited by:

    1. Fritsch, Markus & Haupt, Harry & Ng, Pin T., 2016. "Urban house price surfaces near a World Heritage Site: Modeling conditional price and spatial heterogeneity," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 260-275.
    2. Gaetano Lisi, 2013. "On the Functional Form of the Hedonic Price Function: A Matching-theoretic Model and Empirical Evidence," International Real Estate Review, Asian Real Estate Society, vol. 16(2), pages 189-207.
    3. Simlai, Prodosh, 2014. "Estimation of variance of housing prices using spatial conditional heteroskedasticity (SARCH) model with an application to Boston housing price data," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 17-30.
    4. Hyung-Gun Kim & Kwong-Chin Hung & Sung Park, 2015. "Determinants of Housing Prices in Hong Kong: A Box-Cox Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 50(2), pages 270-287, February.
    5. Mauro Iacobini & Gaetano Lisi, 2016. "Prezzi edonici delle caratteristiche abitative e analisi di regressione multipla: suggerimenti pratici per la stima," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2016(2), pages 5-42.
    6. Gaetano Lisi & Mauro Iacobini, 2013. "Real estate appraisals, hedonic models and the measurement of house price dispersion," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(1), pages 61-73.
    7. Rainer Schulz & Martin Wersing & Axel Werwatz, 2014. "Automated valuation modelling: a specification exercise," Journal of Property Research, Taylor & Francis Journals, vol. 31(2), pages 131-153, June.
    8. Yu, Peiyong, 2015. "The Effect of Eminent Domain on Private and Mixed Development on Property Values," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(2).
    9. Lerbs, Oliver & Sebastian, Steffen P., . "Mietspiegel aus ökonomischer Sicht – Vorschläge für eine Neuregulierung," Beiträge zur Immobilienwirtschaft, University of Regensburg, Department of Economics, number 10.
    10. Lisi, Gaetano, 2012. "On the theoretical derivation of a functional form for the hedonic price function," MPRA Paper 37066, University Library of Munich, Germany.
    11. Jeffrey S. Racine & Christopher F. Parmeter, 2012. "Data-Driven Model Evaluation: A Test for Revealed Performance," Department of Economics Working Papers 2012-13, McMaster University.
    12. Vijverberg, Wim P. & Hasebe, Takuya, 2015. "GTL Regression: A Linear Model with Skewed and Thick-Tailed Disturbances," IZA Discussion Papers 8898, Institute for the Study of Labor (IZA).

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