Constructing a Hedonic Pricing Model for the Rental Market in Varna

Abstract

The aim of the research is to apply a hedonic pricing model to an apartment rental market in the city of Varna, Bulgaria. This widespread model has been used extensively in the various aspects of the rental markets. The sample size of the study is 59 apartments for rent offered on the market in “Chaika” living estate in the city of Varna, published online at “ALO.bg” as of September 1, 2023. We have chosen this specific date, because at that time the market is very brisk. On one hand, the demand of the apartments increases, because of the beginning of the school year, and on the other hand, this period coincides with seasonal layoff unemployment and seasonal labor moving out of the apartments, which they have been renting for the summer jobs. The results of the study explain above 90 percent of variation in rents in Varna, emphasizing the most important factors.