IDEAS home Printed from https://ideas.repec.org/a/nbp/nbpbik/v55y2024i4p519-550.html
   My bibliography  Save this article

Price-setting factors or revealed preferences? How to understand the results of hedonic models and hedonic indices of the housing rental market that base on listings data?

Author

Listed:
  • Michał Hebdzyński

    (Narodowy Bank Polski, Regional Branch in Poznań)

Abstract

The problematic access to housing rental market transactional data forces the use of alternative sources. Using the observations of transactions and listings of apartments for rent located in Poznań, it was checked whether the fruits of hedonic models based on listings data may be treated as a proxy of consumers’ revealed preferences. Moreover, the study answered whether listings and transactions- -based hedonic rent indices show the same dynamics. Observing listings and transactions of the same apartments, it was concluded that the estimated determinants of listed rents may be considered a proxy of revealed preferences. Similarly, the listings-based hedonic rent indices proved to reflect well the dynamics indicated by market transactions. However, it is not the difference between the height of the listed and transacted rents that proved to be problematic in hedonic modelling, but the inequality of the quality structure of the analysed data types.

Suggested Citation

  • Michał Hebdzyński, 2024. "Price-setting factors or revealed preferences? How to understand the results of hedonic models and hedonic indices of the housing rental market that base on listings data?," Bank i Kredyt, Narodowy Bank Polski, vol. 55(4), pages 519-550.
  • Handle: RePEc:nbp:nbpbik:v:55:y:2024:i:4:p:519-550
    as

    Download full text from publisher

    File URL: https://bankikredyt.nbp.pl/content/2024/04/bik_04_2024_05m.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. W. Erwin Diewert & Chihiro Shimizu, 2022. "Residential Property Price Indexes: Spatial Coordinates Versus Neighborhood Dummy Variables," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(3), pages 770-796, September.
    2. Adam Czerniak & Michał Rubaszek, 2018. "The Size of the Rental Market and Housing Market Fluctuations," Open Economies Review, Springer, vol. 29(2), pages 261-281, April.
    3. Michal Rubaszek & Margarita Rubio, 2020. "Does the rental housing market stabilize the economy? A micro and macro perspective," Empirical Economics, Springer, vol. 59(1), pages 233-257, July.
    4. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    5. W. Brunauer & S. Lang & P. Wechselberger & S. Bienert, 2010. "Additive Hedonic Regression Models with Spatial Scaling Factors: An Application for Rents in Vienna," The Journal of Real Estate Finance and Economics, Springer, vol. 41(4), pages 390-411, November.
    6. Jens Kolbe & Rainer Schulz & Martin Wersing & Axel Werwatz, 2021. "Real estate listings and their usefulness for hedonic regressions," Empirical Economics, Springer, vol. 61(6), pages 3239-3269, December.
    7. G. Stacy Sirmans & C.F. Sirmans & John D. Benjamin, 1989. "Determining Apartment Rent: The Value of Amenities, Services, and External Factors," Journal of Real Estate Research, American Real Estate Society, vol. 4(2), pages 33-44.
    8. Horowitz, Joel L, 1992. "The Role of the List Price in Housing Markets: Theory and an Econometric Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(2), pages 115-129, April-Jun.
    9. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    10. Andrea Baranzini & José V. Ramirez, 2005. "Paying for Quietness: The Impact of Noise on Geneva Rents," Urban Studies, Urban Studies Journal Limited, vol. 42(4), pages 633-646, April.
    11. Elliot Anenberg & Steven Laufer, 2017. "A More Timely House Price Index," The Review of Economics and Statistics, MIT Press, vol. 99(4), pages 722-734, July.
    12. John R. Knight & C. F. Sirmans & Geoffrey K. Turnbull, 1994. "List price signaling and buyer behavior in the housing market," Proceedings, Federal Reserve Bank of Philadelphia, pages 177-195.
    13. Earnhart, Dietrich, 2002. "Combining Revealed and Stated Data to Examine Housing Decisions Using Discrete Choice Analysis," Journal of Urban Economics, Elsevier, vol. 51(1), pages 143-169, January.
    14. Adam Nowak & Patrick Smith, 2017. "Textual Analysis in Real Estate," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(4), pages 896-918, June.
    15. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    16. Hill, Robert J. & Trojanek, Radoslaw, 2022. "An evaluation of competing methods for constructing house price indexes: The case of Warsaw," Land Use Policy, Elsevier, vol. 120(C).
    17. Löchl, Michael & Axhausen, Kay W., 2010. "Modelling hedonic residential rents for land use and transport simulation while considering spatial effects," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 3(2), pages 39-63.
    18. Wang, Xiaodan & Li, Keyang & Wu, Jing, 2020. "House price index based on online listing information: The case of China," Journal of Housing Economics, Elsevier, vol. 50(C).
    19. Lyons, Ronan C., 2019. "Can list prices accurately capture housing price trends? Insights from extreme markets conditions," Finance Research Letters, Elsevier, vol. 30(C), pages 228-232.
    20. Li, Han & Wei, Yehua Dennis & Wu, Yangyi, 2019. "Analyzing the private rental housing market in Shanghai with open data," Land Use Policy, Elsevier, vol. 85(C), pages 271-284.
    21. Trojanek, Radoslaw & Gluszak, Michal, 2022. "Short-run impact of the Ukrainian refugee crisis on the housing market in Poland," Finance Research Letters, Elsevier, vol. 50(C).
    22. M. McCord & P.T. Davis & M. Haran & D. McIlhatton & J. McCord, 2014. "Understanding rental prices in the UK: a comparative application of spatial modelling approaches," International Journal of Housing Markets and Analysis, Emerald Group Publishing Limited, vol. 7(1), pages 98-128, February.
    23. Hill Robert J. & Scholz Michael & Shimizu Chihiro & Steurer Miriam, 2022. "Rolling-Time-Dummy House Price Indexes: Window Length, Linking and Options for Dealing with Low Transaction Volume," Journal of Official Statistics, Sciendo, vol. 38(1), pages 127-151, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Trojanek, Radoslaw & Gluszak, Michal, 2022. "Short-run impact of the Ukrainian refugee crisis on the housing market in Poland," Finance Research Letters, Elsevier, vol. 50(C).
    2. Hill, Robert J. & Trojanek, Radoslaw, 2022. "An evaluation of competing methods for constructing house price indexes: The case of Warsaw," Land Use Policy, Elsevier, vol. 120(C).
    3. Pfeifer Norbert & Steurer Miriam, 2022. "Early Real Estate Indicators during the COVID-19 Crisis," Journal of Official Statistics, Sciendo, vol. 38(1), pages 319-351, March.
    4. Mateusz Tomal & Marco Helbich, 2023. "A spatial autoregressive geographically weighted quantile regression to explore housing rent determinants in Amsterdam and Warsaw," Environment and Planning B, , vol. 50(3), pages 579-599, March.
    5. Löchl, Michael & Axhausen, Kay W., 2010. "Modelling hedonic residential rents for land use and transport simulation while considering spatial effects," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 3(2), pages 39-63.
    6. Shimizu, Chihiro & Nishimura, Kiyohiko G. & Watanabe, Tsutomu, 2016. "House prices at different stages of the buying/selling process," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 37-53.
    7. David Agorastos & Rowena Gray & Ronan Lyons & Allison Shertzer, 2024. "The Price of Housing in the United States, 1890–2006," Working Papers 24-12, Federal Reserve Bank of Philadelphia.
    8. Robert J. Hill & Norbert Pfeifer & Miriam Steurer & Radoslaw Trojanek, 2021. "Warning: Some Transaction Prices can be Detrimental to your House Price Index," Graz Economics Papers 2021-11, University of Graz, Department of Economics.
    9. Wang, Xiaodan & Li, Keyang & Wu, Jing, 2020. "House price index based on online listing information: The case of China," Journal of Housing Economics, Elsevier, vol. 50(C).
    10. William Cheung & Lewen Guo & Yuichiro Kawaguchi, 2021. "Automated valuation model for residential rental markets: evidence from Japan," Journal of Spatial Econometrics, Springer, vol. 2(1), pages 1-34, December.
    11. Efthymiou, D. & Antoniou, C., 2013. "How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece," Transportation Research Part A: Policy and Practice, Elsevier, vol. 52(C), pages 1-22.
    12. Maria-Francisca Cespedes-Lopez & Raul-Tomas Mora-Garcia, 2022. "Are Cave Houses a Sustainable Real Estate Alternative?," Land, MDPI, vol. 11(12), pages 1-17, December.
    13. Trojanek, Radoslaw & Huderek-Glapska, Sonia, 2018. "Measuring the noise cost of aviation – The association between the Limited Use Area around Warsaw Chopin Airport and property values," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 103-114.
    14. de Wit, Erik R. & Englund, Peter & Francke, Marc K., 2013. "Price and transaction volume in the Dutch housing market," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 220-241.
    15. Velma Zahirovic-Herbert & Bennie D. Waller & Geoffrey K. Turnbull, 2020. "Properties that Sell at or above Listing Price: Strategic Pricing, Better Broker or Just Dumb Luck?," The Journal of Real Estate Finance and Economics, Springer, vol. 60(1), pages 53-76, February.
    16. Rosane Hungria-Gunnelin, 2013. "Impact of Number of Bidders on Sale Price of Auctioned Condominium Apartments in Stockholm," International Real Estate Review, Global Social Science Institute, vol. 16(3), pages 274-295.
    17. Michael P. Keane & Nada Wasi, 2013. "The Structure of Consumer Taste Heterogeneity in Revealed vs. Stated Preference Data," Economics Papers 2013-W10, Economics Group, Nuffield College, University of Oxford.
    18. Taruttis, Lisa & Weber, Christoph, 2022. "Estimating the impact of energy efficiency on housing prices in Germany: Does regional disparity matter?," Energy Economics, Elsevier, vol. 105(C).
    19. Darren K. Hayunga & R. Kelley Pace, 2017. "List Prices in the US Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 155-184, August.
    20. Dean Gatzlaff & Peng Liu, 2013. "List Price Information in the Negotiation of Commercial Real Estate Transactions: Is Silence Golden?," The Journal of Real Estate Finance and Economics, Springer, vol. 47(4), pages 760-786, November.

    More about this item

    Keywords

    C51; C81; R21;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbp:nbpbik:v:55:y:2024:i:4:p:519-550. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wojciech Burjanek (email available below). General contact details of provider: https://edirc.repec.org/data/nbpgvpl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.