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Creating a Constant-Quality Index for Small Multifamily Rental Housing

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Abstract

Researchers since the early 1960s have constructed constant-quality price indices (CQIs) for single-family dwellings. This paper, however, applies the methodology to construct CQIs for a different property type - small multifamily rental housing with two to four units (MRH) - so that price changes can be measured. Over the period 1983 through 1988, MRH prices increased 70% in Connecticut, but decreased nearly 65% in Baton Rouge, Louisiana. These locations and the sample period are chosen because Connecticut's economy boomed, while Baton Rouge's collapsed; as well, Congress debated and passsed the 1986 Tax Reform Act (TR). TRA affected both regions' MRH prices, but other factors contributed to price changes, also.

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  • Randall S. Guttery & C. F. Sirmans, 1995. "Creating a Constant-Quality Index for Small Multifamily Rental Housing," Journal of Real Estate Research, American Real Estate Society, vol. 10(5), pages 557-568.
    • Handle: RePEc:jre:issued:v:10:n:5:1995:p:557-568
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    JEL classification:

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

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