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Conference Paper: Adjusting for non-linear age effects in the repeat sales index

TitleAdjusting for non-linear age effects in the repeat sales index
Authors
KeywordsAge effects
Depreciation
Duration
Multicollinearity
Repeat-sales index
Issue Date2005
PublisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0895-5638
Citation
Inaugural Singapore/Kong Hong International Real Estate Research Symposium, Singapore, 18-19 July, 2003. In Journal of Real Estate Finance and Economics, 2005, v. 31 n. 2, p. 137-153 How to Cite?
AbstractA true constant quality real estate price index should measure the general change in price level free from any change in quality over time. In recent years, the repeat-sales method has been widely used to construct constant quality property price indices. Since buildings depreciate over time, a simple repeat-sales index would underestimate the growth in property prices. The major problem of controlling the effects of age constant in a repeat-sales model arises from the exact multicollinearity between the age variable and the time dummy variables. In this study, we derive a solution that is theoretically sound and practical by allowing the age effects to be non-linear. In case of leasehold properties, we further incorporated interest rates into the model because the effects of age on real estate prices depend theoretically on interest rates. A sample of residential units in Hong Kong sold more than once from Quarter 2 of 1991 to Quarter 1 of 2001 (more than 11,000 repeat sales pairs) are used for the empirical analysis. © 2005 Springer Science + Business Media, Inc.
Persistent Identifierhttp://hdl.handle.net/10722/81857
ISSN
2015 Impact Factor: 0.698
2015 SCImago Journal Rankings: 1.144
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChau, KWen_HK
dc.contributor.authorWong, SKen_HK
dc.contributor.authorYiu, CYen_HK
dc.date.accessioned2010-09-06T08:22:45Z-
dc.date.available2010-09-06T08:22:45Z-
dc.date.issued2005en_HK
dc.identifier.citationInaugural Singapore/Kong Hong International Real Estate Research Symposium, Singapore, 18-19 July, 2003. In Journal of Real Estate Finance and Economics, 2005, v. 31 n. 2, p. 137-153en_HK
dc.identifier.issn0895-5638en_HK
dc.identifier.urihttp://hdl.handle.net/10722/81857-
dc.description.abstractA true constant quality real estate price index should measure the general change in price level free from any change in quality over time. In recent years, the repeat-sales method has been widely used to construct constant quality property price indices. Since buildings depreciate over time, a simple repeat-sales index would underestimate the growth in property prices. The major problem of controlling the effects of age constant in a repeat-sales model arises from the exact multicollinearity between the age variable and the time dummy variables. In this study, we derive a solution that is theoretically sound and practical by allowing the age effects to be non-linear. In case of leasehold properties, we further incorporated interest rates into the model because the effects of age on real estate prices depend theoretically on interest rates. A sample of residential units in Hong Kong sold more than once from Quarter 2 of 1991 to Quarter 1 of 2001 (more than 11,000 repeat sales pairs) are used for the empirical analysis. © 2005 Springer Science + Business Media, Inc.en_HK
dc.languageengen_HK
dc.publisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0895-5638en_HK
dc.relation.ispartofJournal of Real Estate Finance and Economicsen_HK
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThe final publication is available at Springer via http://dx.doi.org/10.1007/s11146-005-1369-6-
dc.subjectAge effectsen_HK
dc.subjectDepreciationen_HK
dc.subjectDurationen_HK
dc.subjectMulticollinearityen_HK
dc.subjectRepeat-sales indexen_HK
dc.titleAdjusting for non-linear age effects in the repeat sales indexen_HK
dc.typeConference_Paperen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0895-5638&volume=31&spage=137&epage=153&date=2005&atitle=Adjusting+for+non-linear+age+effects+in+the+repeat+sales+indexen_HK
dc.identifier.emailChau, KW: hrrbckw@hku.hken_HK
dc.identifier.emailWong, SK: kelvin.wong@hku.hken_HK
dc.identifier.emailYiu, CY: ecyyiu@hkucc.hku.hken_HK
dc.identifier.authorityChau, KW=rp00993en_HK
dc.identifier.authorityWong, SK=rp01028en_HK
dc.identifier.authorityYiu, CY=rp01035en_HK
dc.description.naturepostprint-
dc.identifier.doi10.1007/s11146-005-1369-6en_HK
dc.identifier.scopuseid_2-s2.0-23844448145en_HK
dc.identifier.hkuros110304en_HK
dc.identifier.hkuros100517-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-23844448145&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume31en_HK
dc.identifier.issue2en_HK
dc.identifier.spage137en_HK
dc.identifier.epage153en_HK
dc.identifier.isiWOS:000231157000003-
dc.publisher.placeUnited Statesen_HK
dc.description.otherInaugural Singapore/Kong Hong International Real Estate Research Symposium, Singapore, 18-19 July, 2003. In Journal of Real Estate Finance and Economics, 2005, v. 31 n. 2, p. 137-153-
dc.identifier.scopusauthoridChau, KW=24830082500en_HK
dc.identifier.scopusauthoridWong, SK=7404591021en_HK
dc.identifier.scopusauthoridYiu, CY=9248825800en_HK
dc.identifier.citeulike280590-
dc.customcontrol.immutablecsl 150625-

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