Estimating House Price Growth with Repeat Sales Data: What's the Aim of the Game?

Wang, Ferdinand T.; Zorn, Peter

doi:10.1006/jhec.1997.0209

Cited by 105 publications

(79 citation statements)

References 31 publications

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“…The target is the statistic that users of an index need to know regardless of the method (Wang and Zorn 1997). Our target is the geometric mean index valuewhich matches well with the Repeat Sales Model.…”

Section: Introductionmentioning

confidence: 98%

“…However, the challenge posed by this method is to compute a functionally correct mathematical model for house prices. A correct set of explanatory variables must be specified and the relationships between these and the response variable must be correctly determined beforehand (Wang and Zorn 1997). Another drawback of this method is that quality characteristics are both numerous and difficult to measure.…”

Section: Introductionmentioning

confidence: 99%

“…This method-the Repeat Sales Modelchecks quality characteristics by comparing the same property over time. It uses data on properties that have actually been sold more than once during the period in question and focuses on price changes rather than prices themselves (Wang and Zorn 1997). The greatest drawback of Repeat Sales is that it wastes data by only using information on repeat sales (Wang and Zorn 1997).…”

Section: Introductionmentioning

confidence: 99%

“…Finally, hybrid models avoid the inefficiency of the Repeat Sales Model because they also use information from houses that are only sold once (Wang and Zorn 1997). They might avoid the problem of misspecification to which the hedonic method is susceptible.…”

Section: Introductionmentioning

confidence: 99%

“…The choice of method for calculating an index depends on the 'target' (Wang and Zorn 1997) and the characteristics of the available dataset (Abraham and Schauman 1991). The target is the statistic that users of an index need to know regardless of the method (Wang and Zorn 1997).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Developing a House Price Index for The Netherlands: A Practical Application of Weighted Repeat Sales

Jansen

Vries

Coolen

et al. 2007

J Real Estate Finance Econ

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This paper describes the development of a house price index that has been introduced in May 2005 in The Netherlands. This monthly index, called Woningwaarde Index Kadaster (House Price Index Kadaster), is designed to detect changes in the price of the overall stock of owner-occupied homes. Fifty-five indices are calculated: one overall index, four regional indices, 12 provincial indices and 38 indices based on combinations of region/province and dwelling type. We used Case and Shiller's geometric Weighted Repeat Sales Model to calculate monthly house price indices. We used recorded data on the sales of over 500,000 owner-occupied homes in The Netherlands, all representing repeat sales between January 1993 and December 2006. The accuracy of the index was determined using the 95% confidence interval. We observed that accuracy might become a problem in smaller sub samples. Revision volatility was explored by comparing the index values computed from all available data until December 2005 with the index values computed from the data available until December 2006. Our analysis showed that revision volatility does not seem to be a major problem to the index. We also explored heteroskedasticity in the Repeat Sales method but did not find conclusive evidence for the proposed heteroskedasticity. Given our target (a geometric mean index value) and the characteristics of the dataset (very large but without property characteristics) the Repeat Sales Method seems to be adequate for calculating a house price index for The Netherlands.

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Section: Introductionmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%