A Methodology to Compute Regional Housing Index Price using Matching Estimator Methods

Paredes - Araya, Dusan (2009): A Methodology to Compute Regional Housing Index Price using Matching Estimator Methods.

Abstract

This paper proposes a methodology for a spatial cost index of housing that considers spatial heterogeneity in properties across regions. The index is built by combining three different techniques to reduce the spatial heterogeneity in housing: Quasi-experimental methods, hedonic prices and Fisher spatial price index. Using microdata from the Chilean survey CASEN 2006, it is shown that the quasi-experimental method called Mahalanobis metric within propensity score calipers (MMWPS) leads to a significant reduction in the potential bias. The technique matches dwellings of a particular region with other properties of similar characteristics in the benchmark region (Metropolitan region). Once the houses are matched, a hedonic price model is computed, and a regional housing price matrix is created using Fisher spatial price indices. The paper concludes the existence of price differentials for homogeneous houses across regions in Chile.

• Item Type: MPRA Paper
• Language: English
• Keywords: Housing Cost, Index Hedonic Prices Index, Matching Estimator, Spatial Fisher Index
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C43 - Index Numbers and Aggregation; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R21 - Housing Demand

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