The Real Value of House Prices: What the Cost of Accommodation Can Tell Policymakers

Journal of the Statistical and Social Inquiry Society of Ireland, Vol. 41, 2011-2012

21 Pages Posted: 6 Mar 2013

See all articles by Ronan C. Lyons

Ronan C. Lyons

Trinity College Dublin; Spatial Economics Research Centre, LSE

Date Written: March 15, 2012

Abstract

This paper explores the potential for the housing market to inform public policy in Ireland by developing a model of the determinants of the cost of accommodation. It does this by using a rich dataset of sales and lettings accommodation costs in Ireland over the period 2006-2010. A large empirical literature has grown up around a core concept that households pay to enjoy particular amenities. Five categories of amenity are included in the analysis: market depth, transport, human capital, social capital and environmental amenities. The typical amenity included is found to have a significant effect on accommodation costs, one that is larger in the sales segment than in the rental segment. Differences by amenity type highlight the importance of using “supply-side variation” to ensure the robustness of estimates of private benefit from public goods.

Keywords: housing markets, housing prices, hedonic regression, amenity valuation

JEL Classification: E62, R21, R3, R31, G12, H4, L92

Suggested Citation

Lyons, Ronan C., The Real Value of House Prices: What the Cost of Accommodation Can Tell Policymakers (March 15, 2012). Journal of the Statistical and Social Inquiry Society of Ireland, Vol. 41, 2011-2012. Available at SSRN: https://ssrn.com/abstract=2228850

Ronan C. Lyons (Contact Author)

Trinity College Dublin ( email )

Dublin 2
Ireland

Spatial Economics Research Centre, LSE ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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