How to Better Measure Hedonic Residential Property Price Indexes

Author/Editor:

Mick Silver

Publication Date:

November 8, 2016

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Hedonic regressions are used for property price index measurement to control for changes in the quality-mix of properties transacted. The paper consolidates the hedonic time dummy approach, characteristics approach, and imputation approaches. A practical hedonic methodology is proposed that (i) is weighted at a basic level; (ii) has a new (quasi-) superlative form and thus mitigates substitution bias; (iii) is suitable for sparse data in thin markets; and (iv) only requires the periodic estimation of hedonic regressions for reference periods and is not subject to the vagrancies of misspecification and estimation issues.

Series:

Working Paper No. 2016/213

Subject:

Commodities Consumer price indexes Inflation Land prices Price indexes Prices Silver

English

Publication Date:

November 8, 2016

ISBN/ISSN:

9781475552249/1018-5941

Stock No:

WPIEA2016213

Pages:

89

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