What is it about?
Providing a reliable house price index (HPI) is crucial for policymakers, real estate and financial markets participants. However the commonly used repeat-sales method is subject to the bias due to the assumption of unchanged housing quality. This study aims to develop a novel improvement-value-adjusted repeat-sales (IVARS) house prices index to remedy such bias.
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Photo by Aaron Birch on Unsplash
Why is it important?
We develop a new IVARS method to build a quality-adjusted housing price index. This study also shows that controlling the quality enhancement effect in the repeat sales method is crucial in mitigating the estimation bias.
Perspectives
We have pursued to test the proposed IVARS method for years, but since there is no good data on updated improvement values of housing in most cities of the world, it could not be achieved until the dataset is available in Auckland. Thanks for the coauthor's advice and insight to make this study possible.
Dr. Edward Chung yim Yiu
University of Auckland
Read the Original
This page is a summary of: A housing price index with the improvement-value adjusted repeated sales (IVARS) method, International Journal of Housing Markets and Analysis, May 2021, Emerald,
DOI: 10.1108/ijhma-01-2021-0005.
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