Econometric methods in housing research

This chapter introduces a selection of econometric practices and methods used in research related to housing markets. It draws on broad application areas, including hedonic pricing models and time series methods, and illuminates the potential of using these methods in housing studies research. The chapter starts by discussing how specific unique attributes of housing markets have implications for the evolution of the use of econometric techniques in housing market analysis. Building on that, it outlines hedonic pricing models and provides an understanding of their broad applicability. It also presents the models’ basic theory and puts forward the preliminary steps in developing them. After that, the chapter outlines different time series econometric methods and their connections with housing economics. It provides a theoretical basis for the specific time series methods discussed and highlights some studies that have used such methods to illustrate their applications in addressing and developing researchable questions in housing studies. Overall, this chapter reflects on the interplay of housing market studies and the use of several econometric methods. It aims to provide a broad and nuanced perspective on how housing markets and systems work in practice by elucidating the theoretical underpinnings and salient features of the aforesaid econometric methods.