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Robust and Resistant Estimations of Hedonic Prices for Second Hand Cars: an Application to the Istanbul Car Market

Author

Listed:
  • Ebru Caglayan Akay

    (Department of Econometrics, Marmara University, Istanbul, Turkey,)

  • mer Faruk Bolukbasi

    (Department of Econometrics, Recep Tayyip Erdo an University, Rize, Turkey,)

  • Engin Bekar

    (Department of Econometrics, Marmara University, Istanbul, Turkey.)

Abstract

In this study, the hedonic price model' has been used in order to determine car characteristics that affect second hand car prices. The hedonic price model is estimated with 1032 observations involving Istanbul second hand car market data. In such a heterogeneous data set, there is often a problem of outliers. Standardized residuals, studentized residuals and DFBETAS criteria were applied to detect them. The hedonic price model is estimated by using robust and resistant methods because ordinary least squares (OLS) method is sensitive to outliers. According to the results of the study, automobile features such as kilometer, fuel type, drivetrain type, body type, engine cylinder volume, transmission type, cruise control, sunroof, trip computer, rain sensor and changing parts affect car prices.

Suggested Citation

  • Ebru Caglayan Akay & mer Faruk Bolukbasi & Engin Bekar, 2018. "Robust and Resistant Estimations of Hedonic Prices for Second Hand Cars: an Application to the Istanbul Car Market," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 39-47.
    • Handle: RePEc:eco:journ1:2018-01-5
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    References listed on IDEAS

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    More about this item

    Keywords

    Hedonic Price Model; Outlier; Robust Estimation; Resistant Estimation;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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