Sample Selection and Biases in Local House Value Indices

Posted: 7 Mar 1997  

Dean H. Gatzlaff

Florida State University

Donald R. Haurin

Ohio State University (OSU) - Economics

Date Written: February, 1997

Abstract

Analysis of cross-sectional or intertemporal variations in house values among localities requires reliable house value indices. However, prior studies applying the hedonic method to transaction data have reported price series that may be biased. Our paper investigates a possible cause of bias and uses a censored regression technique extended to an intertemporal model to derive an unbiased index. We apply our method to 1971-1991 data from the Miami, Florida MSA and find evidence of time varying amounts of bias. Our results suggest that prior studies using the hedonic method and samples consisting only of sold houses have understated the intertemporal variability of house prices.

JEL Classification: C24, R31, E3

Suggested Citation

Gatzlaff, Dean H. and Haurin, Donald R., Sample Selection and Biases in Local House Value Indices (February, 1997). Available at SSRN: https://ssrn.com/abstract=9232

Dean H. Gatzlaff (Contact Author)

Florida State University ( email )

College of Business, Center for Real Estate
821 Academic Way, Rovetta Business Bldg
Tallahassee, FL 32306-1110
United States
850-644-4071 (Phone)
850-644-4077 (Fax)

Donald R. Haurin

Ohio State University (OSU) - Economics ( email )

154 N. Oval Mall
1010G Derby Hall
Columbus, OH 43210-1172
United States
614-292-0482 (Phone)
614-292-9530 (Fax)

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