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Housing rent dynamics in Italy

Author

Listed:
  • Concetta Rondinelli

    () (Banca d'Italia)

  • Giovanni F. Veronese

    () (Banca d'Italia)

Abstract

In this paper we focus on tenant rents in Italy and compare results from several methods for the rent dynamic estimation. We first document the sources of data available and then introduce quality-adjusted techniques, which enable us to separate the price variation due to qualitative changes in housing attributes from pure price changes. Finally, we compare these measures with unconditional and matched-type price indices derived from microdata. Over the period 1998-2006, we estimate a cumulative rent increase ranging between 40 and 80%. The upper bound refers to the average dynamic for a subset of flats entering the market in a given period. The hedonic approach suggests a substantially lower overall growth in tenant rent, around 40% for the same period.

Suggested Citation

  • Concetta Rondinelli & Giovanni F. Veronese, 2010. "Housing rent dynamics in Italy," Questioni di Economia e Finanza (Occasional Papers) 62, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_62_10
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/qef/2010-0062/QEF_62.pdf
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    References listed on IDEAS

    as
    1. Hoffmann, Johannes & Kurz, Claudia, 2002. "Rent indices for housing in West Germany 1985 to 1998," Discussion Paper Series 1: Economic Studies 2002,01, Deutsche Bundesbank.
    2. Robert J. Gordon & Todd vanGoethem, 2005. "A Century of Housing Shelter Prices: Is There a Downward Bias in the CPI?," NBER Working Papers 11776, National Bureau of Economic Research, Inc.
    3. Theodore M. Crone & Leonard I. Nakamura & Richard Voith, 2004. "The CPI for rents: a case of understated inflation," Working Papers 04-17, Federal Reserve Bank of Philadelphia.
    4. Reis, Hugo J. & Santos Silva, J.M.C., 2006. "Hedonic prices indexes for new passenger cars in Portugal (1997-2001)," Economic Modelling, Elsevier, vol. 23(6), pages 890-908, December.
    5. Salvatore Muzzicato & Roberto Sabbatini & Francesco Zollino, 2008. "Prices of residential property in Italy: constructing a new indicator," Questioni di Economia e Finanza (Occasional Papers) 17, Bank of Italy, Economic Research and International Relations Area.
    6. Ariel Pakes, 2003. "A Reconsideration of Hedonic Price Indexes with an Application to PC's," American Economic Review, American Economic Association, vol. 93(5), pages 1578-1596, December.
    7. Jack Triplett, 2004. "Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes: Special Application to Information Technology Products," OECD Science, Technology and Industry Working Papers 2004/9, OECD Publishing.
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    Cited by:

    1. Francesca Modena & Concetta Rondinelli, 2011. "Leaving home and housing prices. The experience of Italian youth emancipation," Temi di discussione (Economic working papers) 818, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Hedonic regressions; Matched-models; CPI; Downward bias;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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