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The reliability of self-reported home values in a developing country context

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  • Gonzalez-Navarro, Marco
  • Quintana-Domeque, Climent

Abstract

This paper provides an analysis, in the context of a developing country, of the reliability of homeowners' estimates of the value of their houses, as obtained through a household survey. We show that non-response to the home value question by the owner is uncorrelated with the appraised value of the house and other demographic characteristics of the respondent. We also document that homeowners with long tenure largely overestimate the value of their home. Moreover, both the bias and the lack of precision in homeowners' estimates are correlated with tenure, but not with socioeconomic characteristics. However, we also show that self-reported home values from short-tenure homeowners can be used to obtain unbiased and precise estimates of the average house value at the census tract level.

Suggested Citation

  • Gonzalez-Navarro, Marco & Quintana-Domeque, Climent, 2009. "The reliability of self-reported home values in a developing country context," Journal of Housing Economics, Elsevier, vol. 18(4), pages 311-324, December.
    • Handle: RePEc:eee:jhouse:v:18:y:2009:i:4:p:311-324
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    1. Prabath Nishantha Edirisinghe, "undated". "Are All Shifting Cultivators poor? Evidence from Sri Lanka's Dry zones," Working papers 113, The South Asian Network for Development and Environmental Economics.
    2. Tur-Sinai, Aviad & Fleishman, Larisa & Romanov, Dmitri, 2020. "The accuracy of self-reported dwelling valuation," Journal of Housing Economics, Elsevier, vol. 48(C).
    3. William F. Vásquez & Laura Beaudin, 2020. "On the use of hypothetical price data to estimate hedonic models in a developing country context," Letters in Spatial and Resource Sciences, Springer, vol. 13(3), pages 219-231, December.
    4. Gabriele Galati & Federica Teppa & Rob Alessie, 2013. "Heterogeneity in house price dynamics," DNB Working Papers 371, Netherlands Central Bank, Research Department.
    5. Marco Gonzalez-Navarro & Climent Quintana-Domeque, 2016. "Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects," The Review of Economics and Statistics, MIT Press, vol. 98(2), pages 254-267, May.
    6. Carlos Felipe Balcázar & Lidia Ceriani & Sergio Olivieri & Marco Ranzani, 2017. "Rent‐Imputation for Welfare Measurement: A Review of Methodologies and Empirical Findings," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 881-898, December.
    7. Alexeev, Sergey, 2020. "The role of imputed rents in intergenerational income mobility in three countries," Journal of Housing Economics, Elsevier, vol. 49(C).
    8. Stijn Dreesen & Sven Damen, 2023. "The accuracy of homeowners’ valuations in the twenty-first century," Empirical Economics, Springer, vol. 65(1), pages 513-566, July.
    9. Gabriele Galati & Federica Teppa & Rob Alessie, 2011. "Macro and micro drivers of house price dynamics: An application to Dutch data," DNB Working Papers 288, Netherlands Central Bank, Research Department.
    10. Nepal, Mani & Rai, Rajesh K. & Khadayat, Madan S. & Somanathan, E., 2020. "Value of cleaner neighborhoods: Application of hedonic price model in low income context," World Development, Elsevier, vol. 131(C).
    11. Sumila Gulyani & Ellen M. Bassett & Debabrata Talukdar, 2012. "Living Conditions, Rents, and Their Determinants in the Slums of Nairobi and Dakar," Land Economics, University of Wisconsin Press, vol. 88(2), pages 251-274.
    12. Alla Koblyakova & Larisa Fleishman & Orly Furman, 2022. "Accuracy of Households’ Dwelling Valuations, Housing Demand and Mortgage Decisions: Israeli Case," The Journal of Real Estate Finance and Economics, Springer, vol. 65(1), pages 48-74, July.
    13. Laura H Atuesta & Yuri Soares, 2018. "Urban upgrading in Rio de Janeiro: Evidence from the Favela-Bairro programme," Urban Studies, Urban Studies Journal Limited, vol. 55(1), pages 53-70, January.
    14. Gonzalez-Navarro, Marco & Quintana-Domeque, Climent, 2010. "Urban Infrastructure and Economic Development: Experimental Evidence from Street Pavement," IZA Discussion Papers 5346, Institute of Labor Economics (IZA).
    15. Gao, Nan & Liang, Pinghan, 2019. "Home value misestimation and household behavior: Evidence from China," China Economic Review, Elsevier, vol. 55(C), pages 168-180.
    16. Hawley, Zackary & Miranda, Juan José & Sawyer, W. Charles, 2018. "Land values, property rights, and home ownership: Implications for property taxation in Peru," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 38-47.
    17. Carin van der Cruijsen & David-Jan Jansen & Maarten van Rooij, 2014. "The rose-colored glasses of homeowners," DNB Working Papers 421, Netherlands Central Bank, Research Department.
    18. Monkkonen, Paavo, 2016. "Where do Property Rights Matter More? Explaining the Variation in Demand for Property Titles across Cities in Mexico," World Development, Elsevier, vol. 88(C), pages 67-78.

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    More about this item

    Keywords

    Bias Inaccuracy Housing prices Owners' estimates Appraised values;

    JEL classification:

    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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