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Sustainability 2014, 6(5), 2946-2960; doi:10.3390/su6052946
Article

Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables

Received: 15 January 2014 / Revised: 8 April 2014 / Accepted: 30 April 2014 / Published: 14 May 2014
(This article belongs to the Special Issue ZEMCH Research Initiatives: Mass Customisation and Sustainability)
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Abstract

In the formulation of hedonic models, in addition to locational factors and building structures which affect the house prices, the generation of the omitted variable bias is thought to occur in cases when local environmental variables and the individual characteristics of house buyers are not taken into consideration. However, since it is difficult to obtain local environmental information in a small neighborhood unit and to observe individual characteristics of house buyers, these variables have not been sufficiently considered in previous studies. We demonstrated that non-negligible levels of omitted variable bias are generated if these variables are not considered.
Keywords: hedonic model; identification; omitted variable bias; neighborhood effect; geographic information system hedonic model; identification; omitted variable bias; neighborhood effect; geographic information system
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Shimizu, C. Estimation of Hedonic Single-Family House Price Function Considering Neighborhood Effect Variables. Sustainability 2014, 6, 2946-2960.

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