The Land Market in Hong Kong: Price Index and Relationship with the Property Market

15 Pages Posted: 30 Jan 2007 Last revised: 21 Aug 2008

See all articles by Helen X. H. Bao

Helen X. H. Bao

University of Cambridge - Department of Land Economy

Sherry Zhefang Zhou

City University of Hong Kong

Date Written: January 27, 2007

Abstract

Housing market is highly heterogeneous and is most accurately represented as a collection of distinct yet related submarkets. In this paper, a flexible semiparametric model is developed to model housing submarkets. The k Nearest Neighbor estimates of hedonic price coefficients, varying both spatially and temporally, are used to identify housing submarkets by Classification and Regression Tree method. The proposed semiparametric model is applied to identify the submarkets in the Hong Kong residential property market. The heterogeneity of local housing market is illustrated by comparing hedonic price coefficients and housing traits of flats within each housing submarket.

Keywords: k Nearest Neighbor, Classification and Regression Tree, hedonic price modelling

JEL Classification: R31, R21, C20

Suggested Citation

Bao, Helen X. H. and Zhou, Sherry Zhefang, The Land Market in Hong Kong: Price Index and Relationship with the Property Market (January 27, 2007). Available at SSRN: https://ssrn.com/abstract=959890 or http://dx.doi.org/10.2139/ssrn.959890

Helen X. H. Bao (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Sherry Zhefang Zhou

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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