Disentanglement of Age, Time and Vintage Effects on Housing Price by Forward Contracts

29 Pages Posted: 12 Sep 2008

See all articles by Edward Chung Yim Yiu

Edward Chung Yim Yiu

University of Auckland Business School

Date Written: September 10, 2008

Abstract

Age, time and vintage effects are exact collinear, so their effects cannot be disentangled in regression analyses. Suggestions have been put forward to deal with this problem, but in vain. Since the problem of exact collinearity requires external information to solve, any manipulation of the existing data is doomed to fail. This paper circumvents the problem fundamentally by exploiting housing forward contracts, which can estimate vintage effects in housing by using a-priori information in pre-occupation sales (i.e. forward contracts). An empirical illustration of a housing estate in Hong Kong is provided.

Keywords: Vintage, Exact Collinearity, Forward Contracts

JEL Classification: C33, C81, R21

Suggested Citation

Yiu, Edward Chung Yim, Disentanglement of Age, Time and Vintage Effects on Housing Price by Forward Contracts (September 10, 2008). Available at SSRN: https://ssrn.com/abstract=1266444 or http://dx.doi.org/10.2139/ssrn.1266444

Edward Chung Yim Yiu (Contact Author)

University of Auckland Business School ( email )

Sir Owen G Glenn Building
12 Grafton Road
Auckland, 1024
New Zealand
+64 923 3913 (Phone)

HOME PAGE: http://https://unidirectory.auckland.ac.nz/people/profile/edward-yiu

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
93
Abstract Views
847
rank
306,130
PlumX Metrics