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Tracking Home-Owners’ Sentiments: Subjective Indices and Convergent Validity

Author

Listed:
  • Sofie R. Waltl

    (Vienna University of Economics and Business
    Luxembourg Institute of Socio-Economic Research (LISER))

  • Anthony Lepinteur

    (University of Luxembourg)

Abstract

Surveys regularly ask home-owners to guess what their property might be worth in the current housing market. We develop suitable statistical techniques to construct hedonic and repeat-sales style house price indices from these owner-estimated values (OEVs). The resulting series are then linked to a large set of quality-adjusted residential property price indices estimated from transaction data allowing us to perform a variety of convergent validity tests. Based on results for 20 countries, several decades and different OEV elicitation techniques, we conclude that the “wisdom of the home-owner crowd” is sufficient to study objective house price dynamics. Yet, surveys fail to accurately measure house price levels.

Suggested Citation

  • Sofie R. Waltl & Anthony Lepinteur, 2025. "Tracking Home-Owners’ Sentiments: Subjective Indices and Convergent Validity," The Journal of Real Estate Finance and Economics, Springer, vol. 70(4), pages 706-734, May.
    • Handle: RePEc:kap:jrefec:v:70:y:2025:i:4:d:10.1007_s11146-023-09949-w
    DOI: 10.1007/s11146-023-09949-w
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    More about this item

    Keywords

    Housing markets; Subjective data; Convergent validity; House price indices;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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