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Submarket, Heterogeneity and Hedonic Prediction Accuracy of Real Estate Prices: Evidence from Shanghai

Author

Listed:
  • Jie Chen

    (Fudan University)

  • Qianjin Hao

    (Fudan University)

Abstract

This paper contributes to the literature by examining how much the prediction accuracy of real estate prices could be improved by applying hedonic equations at suitably defined disaggregate levels and incorporating directional heterogeneity of distance gradients. We build our empirical analysis on a large-scale database of real estate projects sold between 2005 and 2007 in Shanghai. Our analysis suggests that the Shanghai real estate market is a complex aggregate and taking into account submarket and directional heterogeneity in hedonic regressions could provide considerable benefits in improving the precision of real estate price predictions.

Suggested Citation

  • Jie Chen & Qianjin Hao, 2010. "Submarket, Heterogeneity and Hedonic Prediction Accuracy of Real Estate Prices: Evidence from Shanghai," International Real Estate Review, Global Social Science Institute, vol. 13(2), pages 190-217.
    • Handle: RePEc:ire:issued:v:13:n:02:2010:p:190-217
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    References listed on IDEAS

    as
    1. Jie Chen & Qianjin Hao, 2008. "The impacts of distance to CBD on housing prices in Shanghai: a hedonic analysis," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(3), pages 291-302.
    2. Dubin, Robin A, 1998. "Predicting House Prices Using Multiple Listings Data," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 35-59, July.
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    Cited by:

    1. Simon K.C. Cheung, 2017. "A Localized Model for Residential Property Valuation: Nearest Neighbor with Attribute Differences," International Real Estate Review, Global Social Science Institute, vol. 20(2), pages 221-250.

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    More about this item

    Keywords

    Hedonic analysis; Prediction accuracy; Submarket;
    All these keywords.

    JEL classification:

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

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