<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Location is capitalized into the price of the land the structure of a property is built on, and land prices can be expected to vary significantly across space. We account for spatial variation of land prices in hedonic house price models using geospatial data and a semi-parametric method known as mixed geographically weighted regression. To measure the impact on aggregate price change, quality-adjusted (hedonic imputation) house price indices are constructed for a small city in the Netherlands and compared to price indices based on more restrictive models, using postcode dummy variables, or no location information at all. We find that, while taking spatial variation of land prices into account improves the model performance, the Fisher house price indices based on the different hedonic models are almost identical. The land and structures price indices, on the other hand, are sensitive to the treatment of location.</p></abstract>

Location is capitalized into the price of the land the structure of a property is built on, and land prices can be expected to vary significantly across space. We account for spatial variation of land prices in hedonic house price models using geospatial data and a semi-parametric method known as mixed geographically weighted regression. To measure the impact on aggregate price change, quality-adjusted (hedonic imputation) house price indices are constructed for a small city in the Netherlands and compared to price indices based on more restrictive models, using postcode dummy variables, or no location information at all. We find that, while taking spatial variation of land prices into account improves the model performance, the Fisher house price indices based on the different hedonic models are almost identical. The land and structures price indices, on the other hand, are sensitive to the treatment of location.

Accounting for Spatial Variation of Land Prices in Hedonic Imputation House Price Indices: a Semi-Parametric Approach

China University of Mining and Technology

Journal of Official Statistics

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

Location is capitalized into the price of the land the structure of a property is built on, and land prices can be expected to vary significantly across space....

Accounting for Spatial Variation of Land Prices in Hedonic Imputation House Price Indices: a Semi-Parametric Approach

Published Online: Sep 01, 2018

Page range: 695 - 720

Received: Dec 01, 2016

Accepted: Nov 01, 2017

DOI: https://doi.org/10.2478/jos-2018-0033

Keywords
Geospatial information, hedonic modeling, land and structure prices, mixed geographically weighted regression, residential property

© 2018 Yunlong Gong et al., published by Sciendo

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

Accounting for Spatial Variation of Land Prices in Hedonic Imputation House Price Indices: a Semi-Parametric Approach

Published Online: Sep 01, 2018

Page range: 695 - 720

Received: Dec 01, 2016

Accepted: Nov 01, 2017

DOI: https://doi.org/10.2478/jos-2018-0033

KeywordsGeospatial information, hedonic modeling, land and structure prices, mixed geographically weighted regression, residential property

© 2018 Yunlong Gong et al., published by Sciendo

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

Keywords
Geospatial information, hedonic modeling, land and structure prices, mixed geographically weighted regression, residential property