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Is there room for another hedonic model? –The advantages of the GAMLSS approach in real estate research

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  • Marcelo Cajias

Abstract

Hedonic modelling is essential for institutional investors, researchers and urban policy-makers in order to identify the factors affecting the value and future development of rents over time and space. While statistical models in this field have advanced substantially over the last decades, new statistical approaches have emerged expanding the conventional understanding of real estate markets. This paper explores the in-sample explanatory and out-of-sample forecasting accuracy of the Generalized Additive Model for Location, Scale and Shape (GAMLSS) model in contrast to traditional methods in Munich’s residential market. The results show that the complexity of asking rents in Munich is more accurately captured by the GAMLSS approach, leading to a significant increase in the out-of-sample forecasting accuracy.

Suggested Citation

  • Marcelo Cajias, 2017. "Is there room for another hedonic model? –The advantages of the GAMLSS approach in real estate research," ERES eres2017_226, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2017_226
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    References listed on IDEAS

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    More about this item

    Keywords

    GAM; GAMLSS; Hedonic Modelling; Out-of-sample bootstrap; Residential Housing;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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