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Housing rent dynamics in Italy

Author

Listed:
  • Concetta Rondinelli

    (Banca d'Italia)

  • Giovanni F. Veronese

    (Banca d'Italia)

Abstract

In this paper we focus on tenant rents in Italy and compare results from several methods for the rent dynamic estimation. We first document the sources of data available and then introduce quality-adjusted techniques, which enable us to separate the price variation due to qualitative changes in housing attributes from pure price changes. Finally, we compare these measures with unconditional and matched-type price indices derived from microdata. Over the period 1998-2006, we estimate a cumulative rent increase ranging between 40 and 80%. The upper bound refers to the average dynamic for a subset of flats entering the market in a given period. The hedonic approach suggests a substantially lower overall growth in tenant rent, around 40% for the same period.

Suggested Citation

  • Concetta Rondinelli & Giovanni F. Veronese, 2010. "Housing rent dynamics in Italy," Questioni di Economia e Finanza (Occasional Papers) 62, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_62_10
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2010-0062/QEF_62.pdf
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    References listed on IDEAS

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    2. Reis, Hugo J. & Santos Silva, J.M.C., 2006. "Hedonic prices indexes for new passenger cars in Portugal (1997-2001)," Economic Modelling, Elsevier, vol. 23(6), pages 890-908, December.
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    7. Robert J. Gordon & Todd vanGoethem, 2005. "A Century of Housing Shelter Prices: Is There a Downward Bias in the CPI?," NBER Working Papers 11776, National Bureau of Economic Research, Inc.
    8. Salvatore Muzzicato & Roberto Sabbatini & Francesco Zollino, 2008. "Prices of residential property in Italy: constructing a new indicator," Questioni di Economia e Finanza (Occasional Papers) 17, Bank of Italy, Economic Research and International Relations Area.
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    Citations

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    Cited by:

    1. Francesca Modena & Concetta Rondinelli, 2011. "Leaving home and housing prices. The experience of Italian youth emancipation," Department of Economics Working Papers 1101, Department of Economics, University of Trento, Italia.
    2. Greenaway-McGrevy, Ryan & Sorensen, Kade, 2021. "A Time-Varying Hedonic Approach to quantifying the effects of loss aversion on house prices," Economic Modelling, Elsevier, vol. 99(C).
    3. Kavonius, Ilja Kristian & Törmälehto, Veli-Matti, 2022. "Is the financial market driving income distribution? – An analysis of the linkage between income and wealth in Europe," Working Paper Series 2707, European Central Bank.
    4. Kai Duttle, 2016. "Cognitive Skills And Confidence: Interrelations With Overestimation, Overplacement And Overprecision," Bulletin of Economic Research, Wiley Blackwell, vol. 68(S1), pages 42-55, December.
    5. Luca Casolaro & Cristina Fabrizi, 2018. "House prices in local markets in Italy: dynamics, levels and the role of urban agglomerations," Questioni di Economia e Finanza (Occasional Papers) 456, Bank of Italy, Economic Research and International Relations Area.
    6. Ouyang, Yanyan & Cai, Hongbo & Yu, Xuefei & Li, Zijian, 2022. "Capitalization of social infrastructure into China's urban and rural housing values: Empirical evidence from Bayesian Model Averaging," Economic Modelling, Elsevier, vol. 107(C).
    7. Lee, Hung-Wei & Lin, Che-Chun & Tsai, I-Chun, 2023. "Another application of call options: Explaining the divergence between the housing market and the rental market," Finance Research Letters, Elsevier, vol. 53(C).
    8. Ofer Raz-Dror, 2019. "The Changes In Rent In Israel During The Years Of The Housing Crisis 2008–2015," Israel Economic Review, Bank of Israel, vol. 17(1), pages 73-116.
    9. Hu, Lirong & He, Shenjing & Han, Zixuan & Xiao, He & Su, Shiliang & Weng, Min & Cai, Zhongliang, 2019. "Monitoring housing rental prices based on social media:An integrated approach of machine-learning algorithms and hedonic modeling to inform equitable housing policies," Land Use Policy, Elsevier, vol. 82(C), pages 657-673.
    10. Cankun Wei & Meichen Fu & Li Wang & Hanbing Yang & Feng Tang & Yuqing Xiong, 2022. "The Research Development of Hedonic Price Model-Based Real Estate Appraisal in the Era of Big Data," Land, MDPI, vol. 11(3), pages 1-30, February.
    11. Sofia Vale & Felipa de Mello-Sampayo, 2021. "Effect of Hierarchical Parish System on Portuguese Housing Rents," Sustainability, MDPI, vol. 13(2), pages 1-17, January.
    12. Elena Pirani & Maria Veronica Dorgali & Valentina Tocchioni & Alessandra Petrucci, 2024. "Housing Conditions, Neighbourhood Area and Life Satisfaction in Old Age," Econometrics Working Papers Archive 2024_06, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".

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    More about this item

    Keywords

    Hedonic regressions; Matched-models; CPI; Downward bias;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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