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Hedonic Regression Models for Tokyo Condominium Sales

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  • Diewert, W. Erwin
  • Shimizu, Chihiro

Abstract

The paper fits a hedonic regression model to the sales of condominium units in Tokyo over the period 2000-2015. The problem is complicated by the need to decompose the selling price of a unit into a component that can be attributed to the structure area of the unit and another component that can be attributed to the unit’s share of land value. There is very little information on the value of condominium land and so this paper develops a methodology for reducing this knowledge gap. The paper extends the builder’s model which was developed in Eurostat (2013). Characteristics which prove to be important in explaining condominium prices are: the floor space area of the unit, the total land area of the building, the number of units in the building, the total number of stories in the building, the height of the sold unit, the age of the structure and the amount of excess land. The paper also derives an estimate for the annual geometric structure depreciation rate for condominiums in Tokyo.

Suggested Citation

  • Diewert, W. Erwin & Shimizu, Chihiro, 2016. "Hedonic Regression Models for Tokyo Condominium Sales," Microeconomics.ca working papers erwin_diewert-2016-1, Vancouver School of Economics, revised 05 Jan 2016.
  • Handle: RePEc:ubc:pmicro:erwin_diewert-2016-1
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    References listed on IDEAS

    as
    1. W. Erwin DIEWERT & Jan de HAAN & Rens HENDRIKS, 2011. "The Decomposition of a House Price Index into Land and Structures Components: A Hedonic Regression Approach," The Valuation Journal, The National Association of Authorized Romanian Valuers, vol. 6(1), pages 58-105.
    2. Diewert, Erwin, 2007. "The Paris OECD-IMF Workshop on Real Estate Price Indexes: Conclusions and Future Directions," Economics working papers diewert-07-01-03-08-12-12, Vancouver School of Economics, revised 31 Jan 2007.
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    4. Diewert, Erwin & Shimizu, Chihiro, 2015. "Residential Property Price Indices For Tokyo," Macroeconomic Dynamics, Cambridge University Press, vol. 19(8), pages 1659-1714, December.
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    17. Shimizu Chihiro & Nishimura Kiyohiko G. & Watanabe Tsutomu, 2010. "Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 792-813, December.
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    Cited by:

    1. W. Erwin Diewert & Kiyohiko G. Nishimura & Chihiro Shimizu & Tsutomu Watanabe, 2020. "Measuring the Services of Durables and Owner Occupied Housing," Advances in Japanese Business and Economics, in: Property Price Index, chapter 0, pages 223-298, Springer.
    2. Hilber, Christian A. L. & Mense, Andreas, 2021. "Why have house prices risen so much more than rents in superstar cities," LSE Research Online Documents on Economics 114283, London School of Economics and Political Science, LSE Library.
    3. Erwin Diewert & Chihiro Shimizu, 2020. "Alternative Land‐Price Indexes for Commercial Properties in Tokyo," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 784-824, December.
    4. Burnett-Isaacs,, Kate & Diewert, Erwin & Huang, Ning, 2017. "Alternative Approaches for Resale Housing Price Indexes," Microeconomics.ca working papers erwin_diewert-2017-6, Vancouver School of Economics, revised 08 May 2017.
    5. Burnett-Isaacs Kate & Huang Ning & Diewert W. Erwin, 2020. "Developing Land and Structure Price Indices for Ottawa Condominium Apartments," Journal of Official Statistics, Sciendo, vol. 36(4), pages 763-802, December.
    6. Sadayuki, Taisuke, 2018. "Measuring the spatial effect of multiple sites: An application to housing rent and public transportation in Tokyo, Japan," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 155-173.
    7. Diewert, Erwin, 2019. "Quality Adjustment and Hedonics: A Unified Approach," Microeconomics.ca working papers erwin_diewert-2019-2, Vancouver School of Economics, revised 14 Mar 2019.
    8. Daniel McMillen & Chihiro Shimizu, 2021. "Decompositions of house price distributions over time: The rise and fall of Tokyo house prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 49(4), pages 1290-1314, December.
    9. W. Erwin Diewert & Kiyohiko G. Nishimura & Chihiro Shimizu & Tsutomu Watanabe, 2020. "The System of National Accounts and Alternative Approaches to the Construction of Commercial Property Price Indexes," Advances in Japanese Business and Economics, in: Property Price Index, chapter 0, pages 181-219, Springer.
    10. Yi Huang & Geoffrey Hewings, 2021. "More Reliable Land Price Index: Is There a Slope Effect?," Land, MDPI, vol. 10(3), pages 1-24, March.

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    More about this item

    Keywords

    Condominium property price indexes; System of National Accounts; Balance Sheets; methods of depreciation; land and structure price indexes; hedonic re;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • 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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