TY  - JOUR
AU  - Sieg,Holger
AU  - Smith,V. Kerry
AU  - Banzhaf,Spencer
AU  - Walsh,Randy
TI  - Using Locational Equilibrium Models to Evaluate Housing Price Indexes
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7934
PY  - 2000
Y2  - October 2000
UR  - http://www.nber.org/papers/w7934
L1  - http://www.nber.org/papers/w7934.pdf
N1  - Author contact info:
Holger Sieg
Department of Economics
University of Pennsylvania
3718 Locust Walk
Philadelphia, PA 19104
Tel: 215 898 7194
Fax: 215-573-2057
E-Mail: holgers@econ.upenn.edu

V. Kerry Smith
Department of Economics
W.P. Carey School of Business
P.O. Box  879801
Arizona State University
Tempe, AZ 85287-9801
Tel: 480/727-9812
Fax: 480/965-0748
E-Mail: kerry.smith@asu.edu
AB  - This paper analyses how the properties of locational equilibrium models can be used to evaluate approaches for constructing price indexes for heterogeneous houses.  Housing markets play a key role in locational equilibrium models.  Prices for houses determine that implicit costs that households bear when locating in a given community.  We evaluate a variety of price indexes all relying on hedonic models for predicting interjurisdictional housing prices.   The application uses a unique panel data set of housing transactions in Southern California.  The rank predictions of different models are robust with respect to the hedonic model and the composite commodity definition used in aggregation.  They do not depend significantly on the spatial or temporal definitions used to define the choice set of local housing markets.  Finally, housing price estimates are strongly correlated with education and environmental amenities.
ER  -