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Construction of a Spatial Housing Price Index by Estimating an Almost Ideal Demand System

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  • Víctor Iturra
  • Dusan Paredes
Abstract
The aim of this paper is to build, for the first time, a spatial housing price index for the Chilean communities. The first step is to recover hedonic prices of three housing attributes by estimating a mixed index model using a generalised method of moments (GMM) procedure. Second, a censored almost ideal demand system is estimated to build expenditures for every community and to compare them among different spatial units, while maintaining a constant utility level. Using micro data from the 2009 CASEN survey, we show that there are important differences in the expenditure of a consumer in Santiago to access the same level of welfare in another community in the country and there are important differences in housing prices among Chilean communities

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  • Víctor Iturra & Dusan Paredes, 2014. "Construction of a Spatial Housing Price Index by Estimating an Almost Ideal Demand System," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 105(3), pages 301-314, July.
    • Handle: RePEc:bla:tvecsg:v:105:y:2014:i:3:p:301-314
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    File URL: http://hdl.handle.net/10.1111/tesg.12067
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    Cited by:

    1. Qingyun Du & Chao Wu & Xinyue Ye & Fu Ren & Yongjun Lin, 2018. "Evaluating the Effects of Landscape on Housing Prices in Urban China," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 109(4), pages 525-541, September.
    2. Dusan Paredes, 2013. "The Role of Human Capital, Market Potential and Natural Amenities in Understanding Spatial Wage Disparities in Chile," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(2), pages 154-175, June.
    3. Dusan Paredes Araya & Victor Iturra Rivera, 2013. "Substitution bias and the construction of a spatial cost of living index," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 103-117, March.
    4. Dusan Paredes, 2012. "Alternative theories for explaining the spatial wage inequality: a multilevel competition among human capital, NEG and amenities," Documentos de Trabajo en Economia y Ciencia Regional 20, Universidad Catolica del Norte, Chile, Department of Economics, revised Apr 2012.

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    More about this item

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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