A Methodology to Compute Regional Housing Index Price using Matching Estimator Methods

Dusan Paredes - Araya

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes a methodology for a spatial cost index of housing that considers spatial heterogeneity in properties across regions. The index is built by combining three different techniques to reduce the spatial heterogeneity in housing: Quasi-experimental methods, hedonic prices and Fisher spatial price index. Using microdata from the Chilean survey CASEN 2006, it is shown that the quasi-experimental method called Mahalanobis metric within propensity score calipers (MMWPS) leads to a significant reduction in the potential bias. The technique matches dwellings of a particular region with other properties of similar characteristics in the benchmark region (Metropolitan region). Once the houses are matched, a hedonic price model is computed, and a regional housing price matrix is created using Fisher spatial price indices. The paper concludes the existence of price differentials for homogeneous houses across regions in Chile.

Keywords: Housing Cost; Index Hedonic Prices Index; Matching Estimator; Spatial Fisher Index (search for similar items in EconPapers)
JEL-codes: C21 C43 R21 (search for similar items in EconPapers)
Date: 2009-05-04, Revised 2009-05-04
New Economics Papers: this item is included in nep-ecm, nep-geo and nep-ure
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