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Which Factors Capitalize into House Prices? A Bayesian Averaging Approach

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  • David Stadelmann
Abstract
This paper investigates the robustness of 31 community speci?c explanatory variables for house prices in the Swiss metropolitan area of Zurich using Bayesian Model Averaging. The main variables which capitalize with a high posterior prob- ability are location speci?c real estate characteristics, municipal taxes and ex- penditures for culture, health and social services. Demographic as well as other socioeconomic controls seem to be of minor importance. The analysis suggests a minimal list of variables that may be included in any estimation for capitalization of community speci?c characteristics in the context of a metropolitan area in a highly developed country.

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  • David Stadelmann, 2009. "Which Factors Capitalize into House Prices? A Bayesian Averaging Approach," CREMA Working Paper Series 2009-10, Center for Research in Economics, Management and the Arts (CREMA).
    • Handle: RePEc:cra:wpaper:2009-10
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    Cited by:

    1. David Stadelmann & Reiner Eichenberger, 2014. "Public debts capitalize into property prices: empirical evidence for a new perspective on debt incidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(3), pages 498-529, June.
    2. Karolien De Bruyne & Jan Van Hove, 2013. "Explaining the spatial variation in housing prices: an economic geography approach," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1673-1689, May.
    3. Liao, Wen-Chi & Wang, Xizhu, 2012. "Hedonic house prices and spatial quantile regression," Journal of Housing Economics, Elsevier, vol. 21(1), pages 16-27.
    4. Nuri Hacıevliyagil & Krzysztof Drachal & Ibrahim Halil Eksi, 2022. "Predicting House Prices Using DMA Method: Evidence from Turkey," Economies, MDPI, vol. 10(3), pages 1-27, March.
    5. Mario Morger, 2017. "Heterogeneity in Income Tax Capitalization: Evidence from the Swiss Housing Market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(3), pages 227-259, July.
    6. Charles Ka Yui Leung & Edward Chi Ho Tang, 2023. "The dynamics of the house price‐to‐income ratio: Theory and evidence," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 61-78, January.
    7. Schaltegger, Christoph A. & Somogyi, Frank & Sturm, Jan-Egbert, 2011. "Tax competition and income sorting: Evidence from the Zurich metropolitan area," European Journal of Political Economy, Elsevier, vol. 27(3), pages 455-470, September.
    8. Tuğçe Acar, 2020. "Determining Housing Prices Using The Semiparametric Estimation Within The Hedonic Price Model Framework: Case Study of Istanbul Housing Market Example," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 5(3), pages 561-575.
    9. Ouyang, Yanyan & Cai, Hongbo & Yu, Xuefei & Li, Zijian, 2022. "Capitalization of social infrastructure into China's urban and rural housing values: Empirical evidence from Bayesian Model Averaging," Economic Modelling, Elsevier, vol. 107(C).
    10. Tuğçe Acar, 2021. "Determining Housing Prices Using The Semiparametric Estimation Within The Hedonic Price Model Framework: Case Study of Istanbul Housing Market Example," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 5(3), pages 561-575.
    11. David Stadelmann & Steve Billon, 2012. "Capitalisation of Fiscal Variables and Land Scarcity," Urban Studies, Urban Studies Journal Limited, vol. 49(7), pages 1571-1594, May.
    12. Benjamin Wirth & Davidt Hardt & Isabella Lehmann, 2016. "Capitalization of Local Taxes and Expenditures - The case of Bavarian Municipalities," ERSA conference papers ersa16p773, European Regional Science Association.
    13. Tommy Wu & Michael Cheng & Ken Wong, 2017. "Bayesian analysis of Hong Kong's housing price dynamics," Pacific Economic Review, Wiley Blackwell, vol. 22(3), pages 312-331, August.
    14. Piotr Białowolski & Tomasz Kuszewski & Bartosz Witkowski, 2012. "Macroeconomic Forecasts in Models with Bayesian Averaging of Classical Estimates," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 6(1), March.

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    More about this item

    Keywords

    Capitalization; House Price Hedonic; Taxes; Model Uncertainity; Bayesian Model Averaging;
    All these keywords.

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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