Hedonic Estimates of Regional Constant Quality House Prices
It is has been shown that regional housing price indexes reported by the National Association of Realtors (NAR) misstate price change over time due to failure to control for variation in housing quality. However, the erroneous assumption that implicit housing characteristic prices are invariant across regions of the United States may also bias regional constant quality hedonic price indexes. This study shows that housing characteristic prices derived from NAR data do vary significantly by region. It then compares regional price indexes, which do and do not control for regional variation in housing characteristic prices, to demonstrate the biasing effect.
Volume (Year): 19 (2000)
Issue (Month): 3 ()
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