A Simple Alternative House Price Index Method

FAME Working Paper No. 119

33 Pages Posted: 12 Dec 2004

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

Jian Sun

University of Louisville - School of Urban & Public Affairs

Date Written: November 2004

Abstract

This paper presents the Sale Price Appraisal Ratio (SPAR) method for constructing house price indexes. The method, which uses ratios of transaction prices and previous appraised values to build up an index, has been applied since the early 1960s to produce semi-annual price indexes for regions and cities in New Zealand. We compare the official New Zealand indexes for three urban areas with repeat sales and hedonic indexes created from the same transactions data, and observe that the SPAR method produces an index very much like those produced by hedonic methods. Given the number of advantages and few disadvantages that we find for the SPAR method relative to the more traditional methods, we maintain that it should be considered by government agencies elsewhere when developing house price indexes.

Keywords: House price indexes

JEL Classification: R31

Suggested Citation

Bourassa, Steven C. and Hoesli, Martin Edward Ralph and Sun, Jian, A Simple Alternative House Price Index Method (November 2004). FAME Working Paper No. 119. Available at SSRN: https://ssrn.com/abstract=631008 or http://dx.doi.org/10.2139/ssrn.631008

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)

Jian Sun

University of Louisville - School of Urban & Public Affairs ( email )

426 W. Bloom Street
Louisville, KY 40292
United States

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