Hedonic Method Research Articles

Capitalization of Public School Quality into Housing Prices: An Empirical Analysis Based on School District Housing for Public Primary Schools in Shanghai

This paper examines the capitalization of public school quality into housing prices in the specific context of China’s compulsory education system and “district correspondence enrollment” policy, which stipulates a strict correspondence between residential estates and enrollment into public primary schools. Taking 344 neighborhoods in 7 main districts of Shanghai, China as its sample, this paper carries out detailed descriptive analysis of the data. It also employs the traditional Hedonic Price Model and 2SLS regression method to quantitatively calculate the exact capitalization rates while isolating eight non-school attributes affecting housing prices. It yields the conclusion that for every one-rank improvement in the quality of the corresponding public primary school, the average housing price of a neighborhood is projected to increase by 3.1%, 2.8%, and 1.9%, on the citywide, urban, and suburban scale, respectively. The capitalization effect of public school quality in housing prices is statistically significant, so the status-quo of the distribution of public educational resources in Shanghai is still considerably unequal. In the final section of this paper, the significance of this research is discussed and comprehensive policy recommendations and action plan are given in an attempt to mitigate the school district housing fever and educational inequality.

Determination of the parameters of automated valuation models for the hedonic property valuation of residential properties

PurposeThe development and testing of the hedonic methods for property valuation require statistical analysis and professional preparation of relevant databases. As a first step, the presumable relevant influencing variables (parameters) have to be determined. Previous studies have shown a large variety of parameters which overlap or deviate from each other. This study aims to collect, systematise and structure different parameters for the further development and testing of hedonic models.Design/methodology/approachThe study comprises a detailed research and deeper analysis of previous studies regarding the hedonic valuation (mainly for residential properties). Flanking areas of examination serve, if they are appropriately suitable, as supplements (e.g. performance analysis and regression). Parameters are extracted from a wide range of literature, compared and integrated into an overall presentation of the results.FindingsIn total, 407 parameters were extracted from previous studies on hedonic valuation and performance analysis. Because of various definitions of some parameters in the literature, the current paper combined them in one meaning to avoid misunderstandings in further analysis. Higher-level (global) and lower-level (specific) parameters are contained/described in the final list. The result of this study identifies up to five levels of parameters (within the relevant hierarchy).Research limitations/implicationsThe parameters have not yet been statistically tested. The relevance of individual parameters has to be tested with relevant corresponding databases and statistical methods (e.g. correlation and regression).Practical implicationsTo manage larger real estate portfolios, there is a need for regular property valuations. From this perspective, there is a great interest related to the optimisation of the valuation costs, valuation quality and valuation duration. Hedonic methods are considered as an efficient way of performing these valuation tasks. However, further suitable models and parameters are needed. The study describes parameters that can be appropriate for the development of relevant models and creates a structured parameters list, providing the technical basis for the latter. This structured parameter list is substantiated by the evaluation of the existing research.Social implicationsProperty values represent a significant asset for the national economy and for the individual wealth/welfare. The development of property value in a national economy is also relevant for politics, economy and society. The use of hedonic methods and the knowledge of important individual parameters can contribute towards assessing and substantiating the effect of political decisions on the value of real estate.Originality/valueFor the first time, a comprehensive and structured analysis on the value of the relevant parameters used in hedonic methods is performed. Thereby a large number of parameters were identified which question the stability of the results in respective individual studies. In addition, the newly developed hierarchy of parameters can serve as the basis for further research.

The Impact of Aircraft Noise on Housing Prices in Poznan

In the paper, we analyzed the impact of aircraft noise on housing prices. We used a dataset containing geo-coded transactions for 1328 apartments and 438 single-family houses in the years 2010 to 2015 in Poznan. In this research, the hedonic method was used in OLS (ordinary least squares), WLS (weighted least squares), SAR (spatial autoregressive model) and SEM (spatial error model) models. We found strong evidence that aircraft noise is negatively linked with housing prices, which is in line with previous studies in other parts of the world. In our research, we managed to distinguish the influence of aircraft noise on different types of housing. The noise depreciation index value we found in our study was 0.87% in the case of single-family houses, and 0.57% regarding apartments. One of the reasons for the difference in the level of impact of aircraft noise may be the fact that the buyers of apartments may be less sensitive to aircraft noise than the buyers of single-family houses.

Measuring the welfare cost of air pollution in Shanghai: evidence from the housing market

The purpose of this study is to quantify the marginal willingness to pay (MWTP) for clean air in China. We provide the first estimate of MWTP for clean air by implementing a hedonic method using housing price and air quality data from Shanghai. Our estimates imply that air pollution has a significant and negative impact on housing price. We also find that the willingness to pay for better air quality varies significantly across different income groups. This paper helps to deepen our understanding of the economic impacts of air pollution in emerging Asian metropolises where residents are suffering from the most severe respiratory health problems.

Spatial and time effect of subway on property prices

The paper analyzes both spatial and time effects of subway availability on apartment prices in Warsaw, the only city in Poland with rapid urban transit system. The research is based on a data set of 34,274 geo-coded apartment transactions for the years 2008–2015 in Warsaw. For data analysis the hedonic method was used in OLS, SAR, SEM and SGM models. Additionally we used DiD approach to address potential endogeneity. We found strong evidence that the new subway line (M2) in Warsaw influenced apartment prices even before it was completed. We observed a steady price premium adjustment process related to the new subway line. The findings confirm our hypothesis and are in line with previous research carried out in other parts of the world.

O consumo de peixe anchoita na alimentação escolar: aceitabilidade e adesão

Objetivo: Avaliar a possibilidade de inclusão do peixe Engraulis anchoita na alimentação escolar, considerando a aceitabilidade e a adesão, e os fatores que interferem em seu consumo pelos estudantes de escolas públicas no Rio Grande do Sul (RS).Materiais e Métodos: Trata-se de um estudo transversal realizado em escolas públicas do Rio Grande do Sul, Brasil, que compreendeu duas etapas: a primeira analisando a aceitabilidade, pelo método Escala Hedônica, e adesão à preparação “massa com molho de anchoita”; a segunda avaliando a adesão em diferentes preparações com o peixe. Foi avaliada a frequência, absoluta e relativa, utilizando o Programa SPSS 18.0, onde se obteve os valores percentuais e médias de aceitabilidade e adesão dos itens em estudo. O projeto foi aprovado pelo Comitê de Ética em Pesquisa da Universidade Federal do Rio Grande do Sul sob nº 21550, atendendo a todos os critérios legais previstos para pesquisa científica com humanos.Resultados: 1ª etapa, aceitabilidade: participaram 26.533 escolares, sendo 10.169 de escolas estaduais, 6.278 de Rio Grande e 10.086 de Porto Alegre. 2ª etapa, adesão: participaram 25.778 alunos de 77 escolas estaduais e 22 de Porto Alegre. Na etapa 1, verificou-se que 68, 71 e 81% dos alunos, respectivamente, do Estado, Rio Grande e Porto Alegre gostaram da preparação. A adesão foi de 64% nas escolas estaduais e de 62% nas de Rio Grande, enquanto que nas de Porto Alegre foi de 45%. Na etapa 2, a média de adesão foi de 92,1% para pizza, 72,3% para polenta, 87,5% para batata, 83,9% para pão, 72,9% para risoto e 68,5% para massa.Conclusão: Acredita-se ser possível a inclusão do Engraulis anchoita na alimentação escolar por meio de iniciativas que promovam o consumo de pescado.

A big dilemma: Airport noise and property value

Even though many attributes to the airport creates value for properties, many other factors such as noise is considered to have wither neutral or negative effects residential property values. This research examines the relationship between airport noise and housing prices by using disaggregated transactions in Dallas-Fort Worth Airport which is the fourth busiest airport in the United States (FAA, 2015). The effects of airports on residential property values have been studied in several fields and contexts. Tomkins et al. (1998) examined the Manchester Airport by performing hedonic method. In addition, Nelson conducted a meta-analysis about noise and housing price near airport and these studies applied census tract aggregated data. This paper examined the implications of the airport noise on disaggregated residential property transactions in a rapid growing urban area—Dallas Fort Worth Metropolitan- by performing Multi-Level-Modeling. To do this, variables are defined for each level. Property level is considered with many characteristics such as number of bedrooms, bathrooms, floor, etc. Moreover, there are also neighborhood attributes such as demographics, income, and green space to evaluate. Based on results, total and marginal benefits of noise reduction were estimated that a 1 dB noise reduction may lead to increase 0.6% of house values.

Time Dummy Hedonic and Quality‐Adjusted Unit Value Indexes: Do They Really Differ?

One of the main approaches to constructing quality‐adjusted price indexes is the time dummy hedonic method. An alternative but rather unconventional method is the estimation of quality‐adjusted unit value indexes. An advantage of the latter method is the interpretation of the implicit quantity index as the simple ratio of quality‐adjusted or standardized quantities. In this paper we compare the two methods. We show that the expenditure‐share weighted time dummy price index and the quality‐adjusted unit value index can be written as ratios of weighted geometric and harmonic means, respectively, of quality‐adjusted prices. Next, we argue that the two indexes will have similar trends and volatility if the quality‐adjusted prices in the quality‐adjusted unit value index are based on the estimated time dummy model. Our theoretical findings are illustrated on New Zealand scanner data for seven consumer electronics products.

Estimating environment impacts on housing prices

Housing is understood to be a necessity good, whereas the environment is still viewed as a luxury good, which implies that environmental factors significantly impact on housing prices. This impact is usually measured via aspatial linear hedonic models, but this article goes further, extending those traditional analyses to incorporate spatial autocorrelation, spatial heterogeneity, and nonlinearity. A set of competing parametric and semiparametric spatial models, some of which are new proposals, are estimated in order to measure the impact of the environment on such prices. The percentage of residents who declare that the neighborhood has serious pollution problems is used as a (subjective) environmental factor. One of the reasons why this measure was chosen is because the hedonic method only captures people's willingness to pay for perceived rather than measured differences in environmental attributes. We use a massive database containing the price and characteristics of 10,512 homes in Madrid (Q1 2010). The results obtained suggest that the environment has a significant impact on housing prices; however, when the model includes a drift and/or areal variables, these components absorb a substantial part of the environmental impact.

PENGGUNAAN ENZIM RENNET DAN BAKTERI Lactobacillus plantarum YN 1.3 TERHADAP SIFAT SENSORIS KEJU

THE UTILIZING OF RENNET ENZYMES and Lactobacillus plantarum YN 1.3 BACTERIA ON SENSORY CHARACTERISTICS OF CHEESE. This research aims to determine the utilizing of rennet enzymes and Lactobacillus plantarum YN 1.3 bacteria on sensory characteristics of cheese. This experiment using a completely randomized design (CRD) with treatments level of rennet enzymes 10%, 8%, 6%, 4%, 2% and Lactobacillus plantarum YN 1.3 bacteria on 0%, 2%, 4%, 6%, 8% levels, which is each treatment repeated as much as 40 of replications (panelists) with hedonic method used. The result showed that the utilizing of rennet enzyme and Lactobacillus plantarum YN 1.3 bacteria gives highly signifant different effects (P<0,01) on cheese color, aroma, texture and flavor. Based on the results of data analysis and discussions, can be concluded that cheese with rennet enzyme 2% and Lactobacillus plantarum YN 1.3 bacteria 8%, is the best performs and most preferred to panelists.Key words: Cheese, Rennet Enzyme, Lactobacillus plantarum YN 1.3.

The recreational services value of the nearby periurban forest versus the regional forest environment

Most previous valuation studies of forest recreational services using hedonic methods have focused on the direct proximity of housing to nearby forests while treating recreational services as homogeneous. However, households in urban and periurban areas may prefer diverse forest areas in their neighborhoods. The main objective of this study is to estimate and compare the impacts of proximity to forest recreational services based on the nearby forest and the regional forest environment, which includes spatially heterogeneous recreational quality. The regional forest environment is computed based on forest recreational services with respect to the travel time to housing. The empirical results show that differences exist between the forest valuations and their recreational services depending on which forest environment is considered. The size of the nearby forest is the only characteristic with a positive and significant impact on housing prices. Conversely, the regional forest environment positively influences housing prices based on certain parameters, such as large forest size, absence of protected areas and the existence of hiking and biking paths, which imply public access and maintenance.

Estimating the Gains from New Rail Transit Investment: A Machine Learning Tree Approach

Urban rail transit investments are expensive and irreversible. Since people differ with respect to their demand for trips, their value of time, and the types of real estate they live in, such projects are likely to offer heterogeneous benefits to residents of a city. Using the opening of a major new subway in Seoul, we contrast hedonic estimates based on multivariate hedonic methods with a machine learning approach that allows us to estimate these heterogeneous effects. While a majority of the apartment types appreciate in value, other types decline in value. We explore potential mechanisms. We also cross-validate our estimates by studying what types of new housing units developers build in the treated areas close to the new train lines.

A formal framework for hedonic elementary price indices

Hedonic methods are considered state of the art for handling quality changes when compiling consumer price indices. The present article proposes first a mathematical description of characteristics and of elementary aggregates. In a following step, a hedonic econometric model is formulated and hedonic elementary population indices are defined. We emphasise that population indices are unobservable economic parameters that need to be estimated by suitable sample indices. It is shown that within the framework developed here, many of the hedonic index formulae used in practice are identified as sample versions corresponding to particular hedonic elementary population indices. The article closes with an empirical part on quarterly housing data where the considered hedonic indices are estimated along with their bootstrapped confidence intervals. It is shown that the computed confidence intervals together with the results from theory suggest a particular answer to the price index problem.

Hedonic indexes for public and private housing in Costa Rica

PurposeThis study aims to show how hedonic methods can be used to compare the performance of the public and private sector housing markets in Costa Rica.Design/methodology/approachHedonic price indexes are computed using the adjacent-period method. Average housing quality is measured by comparing hedonic and median price indexes. The relative performance of the public and private sector residential construction is compared by estimating separate hedonic models for each sector. A private sector price is then imputed for each house built in the public sector, and a public sector price is imputed for each house built in the private sector.FindingsThe real quality-adjusted price of private housing rose by 12 per cent between 2000 and 2013, whereas the price of private housing rose by 9 per cent. The average quality of private housing rose by 45 per cent, whereas that of public housing fell by 18 per cent. Nevertheless, the hedonic imputation analysis reveals that public housing could not be produced more cheaply in the private sector.Social implicationsThe quality of public housing has declined over time. The hedonic analysis shows that the decline is not because of a lack of competition between construction firms in the public sector. An alternative demand side explanation is provided.Originality/valueThis study applies hedonic methods in novel ways to compare the relative performance of the public and private housing sectors in Costa Rica. The results shed new light on the effectiveness of public sector housing programs.

Trends in hotel pricing

Purpose The aim of this paper is to analyze and compare the effect of different hotel characteristics and room attributes on room rates of hotels in the cities of Lisbon and Porto, the capital and second most important city in Portugal. Design/methodology/approach Using the hedonic pricing method, hotel characteristics are decomposed and analyzed, giving us the perception of the impact of each hotel attributes on the room rates and the people’s willingness to pay for this. Ordinary least square regression analysis was applied to the hedonic price model to find which variables could explain differences in the hotel room rates in Lisbon and Porto. Findings The results suggest that in Lisbon and in Porto, a number of common characteristics have significant effects on consumer willingness to pay for a stay in a hotel as star rating, consumer rating and the room size. In Porto, the existence of a fitness centre and in Lisbon, the distance to the city centre are also attributes that create a premium in room rates. Practical implications The knowledge of the most valued characteristics by consumers is an important tool for hotel managers to define a price strategy. Also important is the knowledge of the attributes that provide more added value for consumers as these should be taken into account in new investment decisions. Originality/value This study highlights the implications of the way one defines and measures qualitative hotel characteristics in hedonic pricing. Although the hedonic method has been applied in several studies, to our knowledge, in Portugal, there are few studies applied only to hotel room rates, and there are no studies comparing hotel room rates in different Portuguese cities. Moreover, the research highlights the critical role of a proper definition and measurement of the variables in hedonic pricing in general and the hotel star in particular.

A study on farmland rental values determinants. Potentialities of micro data with an application of hedonic prices method

The paper aims at isolating factors affecting farmland rents and estimating their effect using hedonic pricing model. Unlike the majority or similar analysis, based on Census aggregated data or surveys, we used a sample of microdata based on land rent contracts signed in the Province of Mantova over the period 2010-2014, matched with other territorial or census databases. We focused on the effect of farmland use on rent price, estimating their implicit values, i.e. the shadow prices. The research findings may help stakeholders and researchers interested in rental market dynamics, in particular at local level. Empirically grounded and transparent information on rental market may provide a new tool for contract negotiation among owners and tenants, improving, at the same time, farmers’ choices.

Dublin House Prices: A History of Booms and Busts from 1708-1949

This paper presents an annual property price index for Dublin over the period 1708-1949. Obtaining the data for a historical index and presenting it was the objective of this research. It was done in the belief that any better insight into property prices via a long range price index would help in delivering more accurate historical facts as they relate to housing. Data for the index was researched from examination of actual property transactions recorded in the Registry of deeds. The index is constructed using the Hedonic method and is estimated in real and nominal terms.

Consumer ratings and the pricing of experience goods: hedonic regression analysis of beer prices

This study fills a void in the literature by providing the first evaluation of the impact of consumer ratings on beer prices using hedonic methods. Our work is based on a dataset consisting of over 400 beers and includes information on calorie content, alcohol content, user rating, and style for each beer. Our results indicate that a 10-point increase in consumer rating is associated with about a $0.50 increase in the price of beer per unit.

Monitoring 15 Years of Residential House Price Development in Hungary With the Help of the FHB House Price Index

The working paper presents the development of the housing market in Hungary between 1998 and 2013 through the history of the FHB House Price Index. For computing the FHB House Price Index FHB applied the hedonic method. At its first publication in 2009 the Index was based on actual transaction data of residential real estate collected from the year of 1998 from appr. 1,000,000 residential properties located in appr. 3,200 municipalities. The source of data include the valuation records of FHB Mortgage Bank ,as well as the buying - selling transaction database purchased from NAV, the national tax authority. Since its first publication the Index is updated on a quarterly basis. The average index value in 2000 was 100 later it peaked at 200,7 in the first quarter of 2008. The 15 years of the housing price history were divided into 4 significantly different eras. When analysing the development of the housing market, relations between selected macroeconomic and financial environment indicators , money market and credit market indices and other data of the housing market were also taken into consideration.

The product life cycle and sample representativity bias in price indexes

ABSTRACTOfficial price indexes are usually calculated using matched samples of products. If products exhibit systematic price trends at different points in their life cycle then matched sample methods may introduce bias if the life cycle movement in the sample does not adequately reflect that in the population. This article explores the extent of these life cycle pricing effects and then examines the bias it can introduce in measured inflation. A large US supermarket scanner data set for six cities and six products over 12 years is used. Using hedonic methods we find that the life cycle component of price change is important across a range of products and cities. To explore the bias introduced by these movements, we use simulations that construct indexes with different sample update frequency. For indexes that are never completely resampled, we find an annual absolute bias of 0.88 and 0.59 percentage points depending upon whether we use the actual prices or prices imputed from our hedonic model. This compares with absolute biases of 0.34 and 0.10 percentage points for the corresponding cases for samples, which are re-selected annually. Thus our results provide strong support for more frequently updating index samples.