Constant-Quality House Price Indexes for Switzerland

22 Pages Posted: 29 May 2008

See all articles by Steven C. Bourassa

Steven C. Bourassa

Florida Atlantic University

Martin Hoesli

University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Geneva - Research Center for Statistics; University of Aberdeen - Business School

Donato Flavio Scognamiglio

University of Berne, Institut für Finanzmanagement

Philippe Sormani

affiliation not provided to SSRN

Date Written: May 8, 2008

Abstract

The measurement of house price movements is a vital topic from both academic and practical perspectives and hence has been the focus of much research. There is almost unanimous consensus in the literature that house price indexes should control for the quality of properties; the most widely used methods to attain this aim are the hedonic and repeat sales approaches. The objective of this paper is to compare the Swiss house prices indexes published by the Swiss National Bank (SNB), which are constructed using medians of list prices as published in newspapers and on the internet, to hedonic indexes based on sale prices for the period 1985 to 2006. We find that the list price indexes exhibit quite a different price path than the hedonic indexes during the period. In particular, they appear to overstate price changes in housing markets. We attribute this, at least in part, to changes over time in the composition of the sample of properties on the market.

Keywords: house price indexes, hedonic method, Switzerland

JEL Classification: E31, R31

Suggested Citation

Bourassa, Steven C. and Hoesli, Martin Edward Ralph and Scognamiglio, Donato Flavio and Sormani, Philippe, Constant-Quality House Price Indexes for Switzerland (May 8, 2008). Swiss Finance Institute Research Paper No. 08-10. Available at SSRN: https://ssrn.com/abstract=1138641 or http://dx.doi.org/10.2139/ssrn.1138641

Steven C. Bourassa

Florida Atlantic University ( email )

777 Glades Road
Boca Raton, FL 33431
United States
5028077642 (Phone)

Martin Edward Ralph Hoesli (Contact Author)

University of Geneva - Geneva School of Economics and Management (GSEM) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, 1211
Switzerland
+41 22 379 8122 (Phone)
+41 22 379 8104 (Fax)

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

University of Geneva - Research Center for Statistics ( email )

Geneva
Switzerland

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom
+41 22 379 8122 (Phone)
+41 22 379 8104 (Fax)

Donato Flavio Scognamiglio

University of Berne, Institut für Finanzmanagement ( email )

Engehaldenstrasse 4
Bern, CH-3012
Switzerland
+41 43 501 06 00 (Phone)
+41 43 501 06 03 (Fax)

Philippe Sormani

affiliation not provided to SSRN ( email )

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