An Empirical Examination of the Stability of Housing Price Equations Over Time |
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Authors: | Jonathan H Mark |
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Institution: | Urban Land Economics Division, Faculty of Commerce and Business Administration, University of British Columbia, Vancouver, B.C. V6T 1Y8. |
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Abstract: | This study investigates the extent to which the coefficients of housing price equations are stable over time. Using annual data from 1959 to 1979 for a large neighbourhood in Vancouver, British Columbia, a series of twenty-four housing price equations is estimated. The estimated coefficients exhibit substantial instability over the period. Further, prediction errors are generally minimized for a given year when the coefficients estimated for that year are used to predict. The results strongly suggest that such equations should be recalibrated each year. |
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