Population distribution-weighting: Exploring a human-centered approach to house price statistics in German housing markets

Abstract

ABSTRACT This paper suggests an improvement to the performance of existing house price indexing methods and explores a way to improve their applicability. The proposed approach takes population distribution into account by integrating it with index prices. This approach is validated with two exemplary applications in Germany at different levels of aggregation. The generated population-weighted boxplots reveal previously hidden, human-centered insights that differ significantly from methods in which only index prices are examined. This standardized approach enables effective subject-matter discourse and resilient decision-making in urban affairs. It is applicable to a broad range of price-related metrics and issues, including affordability in housing, spatial planning, building, and urban development. Its novelty lies in comprehensively integrating population distribution into house price statistics, thereby uniquely connecting the disciplines of economics and spatial planning. It also aims to initiate new conversations that remain unexplored in urban affairs and the real estate industry.