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Architectural Design and the Value of Housing in Riga, Latvia

Author

Listed:
  • Steven Plaut

    (Graduate School of Business Administration, University of Haifa, Haifa 31905, Israe)

  • Egita Uzulena

    (Department of Economics, Central European University, Budapest 1050, Hungary)

Abstract

Architectural design has generally not been included in estimations of hedonic pricing models and the reason is no doubt the difficulty in capturing it in a usable measurement variable. It is usually too idiosyncratic and heterogeneous to “sum up” easily and introduce as an explanatory variable. However, in some housing markets, architectural design consists of a limited number of standardized “prototypes”, which can then be used as explanatory variables in hedonic estimations. Such is the case for Riga, Latvia, where almost the entire housing stock fits into about a score of fairly standardized architectural design types. This paper is an empirical analysis of the Riga housing market, which only became a “market” in a meaningful sense after the collapse of the Soviet regime in Latvia. The paper analyzes a set of about 3500 transactions, all from recent years. We estimate the elasticity of housing value with respect to size of housing units and some other physical features, and the value of the different architectural designs, controlling for location. This is one of the first hedonic or microeconomic analyses of housing values in any post-Soviet transitional economy.

Suggested Citation

  • Steven Plaut & Egita Uzulena, 2006. "Architectural Design and the Value of Housing in Riga, Latvia," International Real Estate Review, Global Social Science Institute, vol. 9(1), pages 112-131.
    • Handle: RePEc:ire:issued:v:09:n:01:2006:p:112-131
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    References listed on IDEAS

    as
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    4. Renaud, Bertrand M., 1996. "Housing finance in transition economies : the early years in Eastern Europe and the former Soviet Union," Policy Research Working Paper Series 1565, The World Bank.
    5. Stephen B. Butler & Ritu Nayyar†Stone & Sheila O’Leary, 1999. "The Law and Economics of Historic Preservation in St. Petersburg, Russia," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 11(1), pages 24-44, March.
    6. Kerry D. Vandell & Jonathan S. Lane, 1989. "The Economics of Architecture and Urban Design: Some Preliminary Findings," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 235-260, June.
    7. Hough, Douglas E. & Kratz, Charles G., 1983. "Can "good" architecture meet the market test?," Journal of Urban Economics, Elsevier, vol. 14(1), pages 40-54, July.
    8. Song, Yan & Knaap, Gerrit-Jan, 2003. "New urbanism and housing values: a disaggregate assessment," Journal of Urban Economics, Elsevier, vol. 54(2), pages 218-238, September.
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    Cited by:

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    2. Felipe Encinas & Carlos Aguirre & Carlos Marmolejo-Duarte, 2018. "Sustainability Attributes in Real Estate Development: Private Perspectives on Advancing Energy Regulation in a Liberalized Market," Sustainability, MDPI, vol. 10(1), pages 1-26, January.

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    More about this item

    Keywords

    architecture; Hedonic models; transitional economies; Riga; pricing;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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