Price-setting factors or revealed preferences? How to understand the results of hedonic models and hedonic indices of the housing rental market that base on listings data?

Abstract

The problematic access to housing rental market transactional data forces the use of alternative sources. Using the observations of transactions and listings of apartments for rent located in Poznań, it was checked whether the fruits of hedonic models based on listings data may be treated as a proxy of consumers’ revealed preferences. Moreover, the study answered whether listings and transactions- -based hedonic rent indices show the same dynamics. Observing listings and transactions of the same apartments, it was concluded that the estimated determinants of listed rents may be considered a proxy of revealed preferences. Similarly, the listings-based hedonic rent indices proved to reflect well the dynamics indicated by market transactions. However, it is not the difference between the height of the listed and transacted rents that proved to be problematic in hedonic modelling, but the inequality of the quality structure of the analysed data types.