Popular Attributes Selection in Formulating Control Variables of House Preference for Assisting Hedonic Pricing Model in Malaysia

Abstract

The house is a vital facility with a high financial investment portion of livelihood. Many studies discovered the significant variables influencing willingness to pay (WTP) for house preferences using the hedonic pricing model to reveal the living needs. Numerous literature reviews have been done on the theory’s functional models, methodology, and application. However, less focus has been given to the appropriate control variables applied in the model according to the location. Thus, researchers often needed help identifying the suitable variables to be adopted as the control attributes possibly influencing WTP for the hedonic pricing model to minimize the model’s misspecification or over-specification. Hence, this study aims to review the empirical house preference variables, mainly in Malaysia case studies, and identify the popular attributes based on functional categories and their impact on the WTP. The identification narratively uses 35 articles from five scholarly databases and discovered 87 empirical attributes categorized into four functional variables: 'locational and neighbourhood,' 'building’s structural, ’natural and environmental,' and 'socio-related.’ This reveals the understanding of house preferences so that a proper data acquisition process, methods, and model functional forms can be prudently considered when dealing with the hedonic pricing model in developing countries, specifically Malaysia.