Do Housing Submarkets Really Matter ?

Bourassa, Steven C.; Hoesli, Martin E.; Peng, Vincent S.

Report

English

Do Housing Submarkets Really Matter ?

Contributors

Bourassa, Steven C.; Hoesli, Martin E.; Peng, Vincent S.

Collection

Cahiers de recherche; 2003.12

Publication date

2003

Abstract

We maintain that the appropriate definition of submarkets depends on the use to which they will be put. For mass appraisal purposes, submarkets should be defined so that the accuracy of hedonic predictions will be optimized. Thus we test whether out-of-sample hedonic value predictions can be improved when a large urban housing market is divided into submarkets and we explore the effects of alternative definitions of submarkets on the accuracy of predictions. We compare a set of submarkets based on small geographical areas defined by real estate appraisers with a set of statistically generated submarkets consisting of dwellings that are similar but not necessarily contiguous. The empirical analysis uses a transactions database from Auckland, New Zealand. Price predictions are found to be most accurate when based on the housing market segmentation used by appraisers. We conclude that housing submarkets matter, and location plays the major role in explaining why they matter.

UNIGE affiliation entities

Faculté d'économie et de management

Citation (ISO format)

BOURASSA, Steven C., HOESLI, Martin E., PENG, Vincent S. Do Housing Submarkets Really Matter ? 2003

Report

Identifiers

PID : unige:5796

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2926downloads

Creation

15/04/2010 12:20:13

First validation

15/04/2010 12:20:13

Update

14/03/2023 15:26:37

Status update

14/03/2023 15:26:37

Last indexation

29/10/2024 14:23:16

Do Housing Submarkets Really Matter ?

Contributors

Collection

Publication date

Abstract

UNIGE affiliation entities

Citation (ISO format)

Main files (1)

Identifiers

Technical informations

Creation

First validation

Update

Status update

Last indexation