Defining Housing Submarkets

This paper develops a statistical method for defining housing submarkets. The method is applied using household survey data for Sydney and Melbourne, Australia. First, principal component analysis is used to extract a set of factors from the original variables for both local government area (LGA) data and a combined set of LGA and individual dwelling data. Second, factor scores are calculated and cluster analysis is used to determine the composition of housing submarkets. Third, hedonic price equations are estimated for each city as a whole, fora prioriclassifications of submarkets, and for submarkets defined by the cluster analysis. The weighted mean squared errors from the hedonic equations are used to compare alternative classifications of submarkets. In Melbourne, the classification derived from aKmeans clustering procedure on individual dwelling data is significantly better than classifications derived from all other methods of constructing housing submarkets. In some other cases, the statistical analysis produces submarkets that are better than thea prioriclassification, but the improvement is not significant.     

Hedonic versus repeat-sales housing price indexes for measuring the recent boom-bust cycle

Standard housing price indexes rely on strong constant-quality assumptions and often conflict. Hedonic price indexes overcome limitations of median price and repeat-sales indexes but their implementation has been limited by a lack of data. This paper constructs hedonic indexes at the zip code level for the Los Angeles and San Diego metropolitan areas using considerably more detailed data than previously available. Our sample was collected by a mortgage technology firm, and consists of almost 1.1 million transactions during the boom-bust cycle since 2000. Our hedonic regressions include new spatial models that capture correlations within submarkets (using zip codes as proxies) and allow temporal asymmetry. Compared to a repeat-sales price index constructed from the same data, the hedonic indexes indicate that the market peaked about 11 months later in Los Angeles and about 2 months earlier in San Diego, show less pre-peak appreciation and post-peak depreciation in low-tier housing and more pre-peak appreciation in high-tier housing. We also find that the intensity of the cycle varies greatly across zip codes and price-tiers in a pattern consistent with foreclosure activity.     

Racial discrimination in the Boston housing market

Recent studies suggest that price differentials between what whites and blacks pay for housing are largely a function of changes in supply and demand in the two submarkets. These studies, however, estimate models that assume a unified housing market. As a result, imputed prices of housing attributes cannot vary with location, and the analyses obscure important racial price differentials. Based on a more realistic and complex housing market theory, the model described in this paper indicates that housing prices are substantially higher in the ghetto and transition areas than in white areas, and that within the same area blacks must pay more than whites for equivalent housing.     

Segmentation in urban housing markets

This study tests the hypothesis that urban housing markets are segmented in the sense of significantly different prices per unit of housing services existing contemporaneously in spatially or structurally defined submarkets. Using an unusually rich data set for single-family, suburban Boston homes, significant differences in the prices of individual housing attributes are found; but these differences result in negligible differences in the overall price per unit of services. A main conclusion is that the market is working fairly efficiently to eliminate price premiums and discounts, at least in the portion of the market analyzed.     

Empirical analysis of the impact of a landlord-tenant ordinance on property values2

The purpose of this article is to analyze the impact of a landlord-tenant ordinance (LTO) on property values, using time series data for the City of Evanston, Illinois, where the ordinance has been enacted since 1975. The empirical data analysis, which includes a trend analysis of hedonic price indices for both rental and owner-occupied property, has shown that an LTO is not likely to significantly affect housing values. Those remedies provided in the LTO are not likely to be radical departures from the current practices such as housing/building code, and can therefore not be expected to affect housing values substantially.     

Price dynamics in public and private housing markets in Singapore

In down-payment constrained housing consumption models, increases in house prices could trigger household mobility decisions in housing markets. This study empirically tests house price dynamics associated with the mobility of households in the public resale and private housing markets in Singapore. The results show that stochastic permanent breaks were found in the public housing resale prices and private housing prices. The relative prices drift apart occasionally, but mean-revert to a long-run fundamental equilibrium. Error correction mechanisms and lagged public housing prices were also found to have significant explanatory effects for price changes in the private housing markets. The results support the hypothesis that household mobility creates co-movements of prices in public and private housing submarkets in the long run.     

Hedonic prices and composite commodities

In this paper we conjecture and, to an extent, prove that recently noted restrictions required for the logical coherence and empirical relevance of hedonic price models make these models no more general than traditional housing services models. In particular, intra-urban variation in hedonic prices may not be substantively related to market equilibration at all, and therefore is not evidence for the existence of housing sub-markets. Moreover, in the case of jointly produced housing characteristics, the hedonic price models are found to be less general than the traditional homogeneous housing services models.     

基于主成分分析法的特征价格模型

将主成分分析法与特征价格模型相结合,对房地产项目的销售均价进行定价。解决了分析样本数据少、部分特征属性间相关性强的问题;建立了住宅项目的特征定价模型。通过实证分析,验证出模型的效果较好,可用于确定新建项目的销售均价。     

基于Hedonic模型的兰州市二手房住宅特征价格研究

Hedonic特征价格模型是研究住宅属性与价格关系的有效手段。文章将hedonic特征价格模型用于兰州市二手房市场研究,分析1150个兰州市二手房的详细资料,进行hedonic多重回归分析,并用SPSS软件模拟特征价格模型。结果显示,半对数模型拟合系数最高,通过半对数特征价格模型讨论了兰州市二手房价格和住房特征要素之间的定量关系。     

Intraurban variation in the price of housing

Theoretical models of spatial consumer behavior assume the existence of a housing price surface that increases with accessibility. It is often hypothesized that inadequate accessibility measures are responsible for the failure of most empirical studies to support this premise. A general accessibility measure consisting of a double power series in cartesian coordinates is developed and shown to represent a general formulation of traditional accessibility measures. This formulation is incorporated in a hedonic price regression model, and the model is estimated using census tract data for the city of Milwaukee. The hedonic prices are then used to construct intraurban housing price indexes. The results of this study provide strong support for the existence of the presumed price surface. A comparison of this new hedonic price model with traditional models suggests that the double power series formulation is a superior representation of accessibility.     

An alternative test of the hedonic theory of housing markets

In this paper the hedonic theory of housing markets is used to generate a multinomial logit model of household behavior in an urban housing market. Application of hedonic theory to housing markets is by now fairly familiar and a link to multinomial logit has also been established. However, by emphasizing more heavily the bid price interpretation of hedonic theory, this paper develops a new connection to econometric estimation that essentially involves running the usual logit equations in reverse. One advantage of this approach is that the link between the logit equations and hedonic theory involves bid price rather than utility functions, and this in turn permits the empirical results to be given an extremely clear interpretation. Furthermore, in contrast to the standard logit model, the extreme value distribution required to justify the estimation technique emerges endogenously as part of the analysis.     

住房价格的特征法分析与“夹心层”住房需求的实证估测

本文基于对上海市600余名夹心层(青年白领)人士的问卷调查,采用特征价格法模型计量测度了住房关键性特征对上海住房价格的影响。在此基础上,根据上海市夹心层真实住房需求分布情况推算出该群体期望住房的市场价格,从而为进一步衡量夹心层住房购买力缺口提供科学依据。     

Estimation and policy implications of rental housing demand

The demand for rental housing using the Annual Housing Survey SMSA sample for 1977 is estimated. The principal determinants of rental housing demand, namely housing price and permanent/transitory income, are computed through spatially varying hedonic price techniques and instrumental variables methods (relating to human and nonhuman capital), respectively. Based on the demand estimation results, impacts of hypothetical cash and rent subsidy programs are analyzed in terms of “housing” and “welfare” effects. It is found that a rent subsidy achieves considerably larger effects than does a cash subsidy.     

Raising the bar (7)

This editorial summarises the papers published in issue 13.1 so as to raise the bar in applied spatial economic research and highlight new trends. The first paper adopts a scale neutral approach to investigate the spatial mechanisms that cause regional innovation and growth. The second paper claims that population-weighting when calculating indices of regional inequality might lead to inconsistent outcomes. The third paper estimates the effect of distance between family residence and higher education institution on a student's academic performance, thereby accounting for endogenous regressors. The fourth paper shows an inverted U-shaped relationship between economic development at region of origin and the propensity to migrate using a multilevel approach. The fifth paper provides spatial econometric evidence of price competition between sellers of used books on Amazon.com. The last paper estimates a hedonic housing price equation and parameterizes the spatial weight matrix to determine how far back in time buyers, sellers and realtors are looking at the housing market.     

Convenient links for the estimation of hedonic price indexes: the case of unique,infrequently traded assets

Hedonic methods are a prominent approach in the construction of quality‐adjusted price indexes. This paper shows that the process of computing such indexes is substantially simplified if arithmetic (geometric) price indexes are computed based on exponential (log‐linear) hedonic functions estimated by the Poisson pseudo‐maximum likelihood (ordinary least squares) method. A Monte Carlo simulation study based on housing data illustrates the convenience of the links identified and the very attractive properties of the Poisson estimator in the hedonic framework.     

住房价格的特征法分析与“夹心层”住房需求的实证估测

本文基于对上海市600余名夹心层（青年白领）人士的问卷调查,采用特征价格法模型计量测度了住房关键性特征对上海住房价格的影响。在此基础上,根据上海市夹心层真实住房需求分布情况推算出该群体期望住房的市场价格,从而为进一步衡量夹心层住房购买力缺口提供科学依据。     

Managing hedonic housing price indexes: The French experience

Despite their theoretical advantages, hedonic housing price indexes are not so commonly computed by statistical agencies or real estate professionals. Many published indexes still rely on mean or median prices, or favor repeat-sales methods, which require less information about the attributes of the housing units and less econometric expertise on the part of the index compilers, but may be less accurate and robust. In France as in other countries where housing sales have to be recorded in front of a notary, data on transaction prices and characteristics of dwellings are available. Such data have been centralized since 1994, and quarterly hedonic housing price indexes have been computed for more than 10 years. This paper describes the institutional setting of housing transactions in France, and the collaboration between the notaries and the national statistical agency (INSEE). The former are responsible for data collection and regular computation, whereas the latter takes scientific responsibility for the method. The detailed information on the individual properties transacted remains proprietary data, but disaggregated indexes are publicly and freely available. This organization and assignment of roles has proven effective and might be extended to countries with similar institutional settings.     

The Market for Residential Architecture: 19th Century Row Houses in Boston′s South End

This study explores the market response to a major 19th century American urban architectural form, the row house. The paper presents an hedonic price index for a set of housing characteristics including lot and house size, location amenities within the neighborhood, construction materials, architectural style, and detailed architectural features. The homogeneity in form and layout of the row houses coupled with the variety of architectural styles and detailed features provides an unusual opportunity to test the effect of architecture on market value. The housing characteristics included in the study account for 88% of the price variance across the sampled row houses. The evidence marshalled here suggests that residential architecture matters in the marketplace and that specific architectural features are more highly valued when they differentiate one row house from its immediate neighbors.     

The Auction Price of Apartments in Moscow: Hedonic Estimation in Disequilibrium1

The purpose of this paper is to see how economic factors determine prices in the previously communist countries undergoing privatization. This does not concern the auctions of big state enterprises where the prices are found to be rigged. In this paper we estimate hedonic price functions based on a unique data set on auction prices of apartments in Moscow. We collected the data ourselves by attending the auctions and gathered data on the characteristics. We estimated the hedonic equations using a disequilibrium approach because no equilibrium prices were observed for large number of apartments that were withdrawn from the auction. We found that, as the privatization of residential housing was carried out, the hedonic price equations fit the data remarkably well.     

Estimating the Demand for Housing, Land, and Neighbourhood Characteristics

This paper provides estimates of the structure of demand for individual housing and neighbourhood characteristics and for land in two British cities. We estimate a hedonic price function, and from this obtain the implicit prices of house attributes. These prices are used to estimate a demand system for each city. These perform well, and enable us to calculate price and income elasticities for each of the non-dichotomous characteristics and for land. To counteract criticisms of demand estimates derived within the hedonic framework a method is developed for selecting an appropriate set of instrumental variables. Estimates derived from this method, however, differ only slightly from those obtained using the conventional techniques. Several features of these estimates provide insights into the unusual characteristics of the British housing market, the effects of constraints imposed by land use planning, and the effects of changing income distribution on the structure of demand.