Property Renovations and Their Impact on House Price Index Construction
Year: 2019
Type: article
Abstract: This paper provides the first wide-scale report of property renovation bias in repeat-sales house price indices across a multitude of U.S. geographies. In local markets, omitting information on property improvements can bias index estimates in a predictable manner and can distort valuations by as much as 15% in the central districts of large cities. This systematic variation in bias is partially a function of the disparate concentration of renovation activity with property improvements occurring more frequently in denser areas. The distortionary effect tends to decline outside of downtown areas and becomes negligible in smaller cities.
Source: Journal of Real Estate Research
Authors: Alexander N. Bogin, William M. Doerner
Language: English
Topic: Housing Market and Economics
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W2612972168