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On Nonparametric Estimation of a Hedonic Price Function

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  • Haupt, Harry
  • Schnurbus, Joachim
  • Tschernig, Rolf

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.
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Suggested Citation

  • Haupt, Harry & Schnurbus, Joachim & Tschernig, Rolf, 2008. "On Nonparametric Estimation of a Hedonic Price Function," University of Regensburg Working Papers in Business, Economics and Management Information Systems 429, University of Regensburg, Department of Economics.
    • Handle: RePEc:bay:rdwiwi:5123
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    References listed on IDEAS

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    1. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-954, July.
    2. 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.
    3. 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.
    4. 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..
    5. Qi Li & Jeffrey Scott Racine, 2006. "Nonparametric Econometrics: Theory and Practice," Economics Books, Princeton University Press, edition 1, volume 1, number 8355.
    6. 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.
    7. Clifford M. Hurvich & Jeffrey S. Simonoff & Chih‐Ling Tsai, 1998. "Smoothing parameter selection in nonparametric regression using an improved Akaike information criterion," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 60(2), pages 271-293.
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    Citations

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    Cited by:

    1. 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).
    2. 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.
    3. Lerbs, Oliver & Sebastian, Steffen P., . "Mietspiegel aus ökonomischer Sicht – Vorschläge für eine Neuregulierung," Beiträge zur Immobilienwirtschaft, University of Regensburg, Department of Economics, number 10, August.
    4. 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.
    5. Alice Barreca & Rocco Curto & Diana Rolando, 2020. "Urban Vibrancy: An Emerging Factor that Spatially Influences the Real Estate Market," Sustainability, MDPI, vol. 12(1), pages 1-23, January.
    6. 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.
    7. Gaetano Lisi, 2013. "On the Functional Form of the Hedonic Price Function: A Matching-theoretic Model and Empirical Evidence," International Real Estate Review, Global Social Science Institute, vol. 16(2), pages 189-207.
    8. Gaetano Lisi, 2019. "Hedonic pricing models and residual house price volatility," Letters in Spatial and Resource Sciences, Springer, vol. 12(2), pages 133-142, August.
    9. 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.
    10. Sebastian Steffen & Lerbs Oliver, 2016. "Mietspiegel aus ökonomischer Sicht – Vorschläge für eine Neuregulierung," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(4), pages 347-363, December.
    11. 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.
    12. 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.
    13. 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.
    14. Lisi, Gaetano, 2012. "On the theoretical derivation of a functional form for the hedonic price function," MPRA Paper 37066, University Library of Munich, Germany.
    15. 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.
    16. Vijverberg, Wim P. & Hasebe, Takuya, 2015. "GTL Regression: A Linear Model with Skewed and Thick-Tailed Disturbances," IZA Discussion Papers 8898, Institute of Labor Economics (IZA).

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