<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>Hedonic regressions are widely used and recommended for property price index (PPI) measurement. Hedonic PPIs control for changes in the quality-mix of properties transacted that can confound measures of change in average property prices. The widespread adoption of the hedonic approach is primarily due to the increasing availability, in this digital age, of electronic data on advertised and transaction prices of properties and their price-determining characteristics. Yet hedonic PPIs are only as good as the underlying estimated hedonic regressions. Regression-based measures are unusual in official economic statistics. There is little technical support in the international Handbooks and Guides for diagnostic measures and graphical plots for estimated regression equations as applied to PPIs. These diagnostics are essential to the transparency and credibility of hedonic PPI measurement. This article seeks to remedy this.</p>
</abstract>

Hedonic regressions are widely used and recommended for property price index (PPI) measurement. Hedonic PPIs control for changes in the quality-mix of properties transacted that can confound measures of change in average property prices. The widespread adoption of the hedonic approach is primarily due to the increasing availability, in this digital age, of electronic data on advertised and transaction prices of properties and their price-determining characteristics. Yet hedonic PPIs are only as good as the underlying estimated hedonic regressions. Regression-based measures are unusual in official economic statistics. There is little technical support in the international Handbooks and Guides for diagnostic measures and graphical plots for estimated regression equations as applied to PPIs. These diagnostics are essential to the transparency and credibility of hedonic PPI measurement. This article seeks to remedy this.

Econometric Issues in Hedonic Property Price Indices: Some Practical Help

Journal of Official Statistics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Econometric Issues in Hedonic Property Price Indices: Some Practical Help"}

Hedonic regressions are widely used and recommended for property price index (PPI) measurement. Hedonic PPIs control for changes in the quality-mix of...

Econometric Issues in Hedonic Property Price Indices: Some Practical Help

Publié en ligne: 29 mars 2022

Pages: 153 - 186

Reçu: 01 juil. 2020

Accepté: 01 avr. 2021

DOI: https://doi.org/10.2478/jos-2022-0008

Mots clés
Hedonic regressions, residential property price index, commercial property price index, house price index, regression diagnostics

© 2022 Mick Silver, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Econometric Issues in Hedonic Property Price Indices: Some Practical Help

Publié en ligne: 29 mars 2022

Pages: 153 - 186

Reçu: 01 juil. 2020

Accepté: 01 avr. 2021

DOI: https://doi.org/10.2478/jos-2022-0008

Mots clésHedonic regressions, residential property price index, commercial property price index, house price index, regression diagnostics

© 2022 Mick Silver, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Mots clés
Hedonic regressions, residential property price index, commercial property price index, house price index, regression diagnostics