IDEAS home Printed from https://ideas.repec.org/p/ubc/bricol/erwin_diewert-2014-17.html
   My bibliography  Save this paper

Residential Property Price Indexes for Japan: An Outline of the Japanese Official RPPI

Author

Listed:
  • Diewert, W. Erwin
  • Nishimura , Kiyohiko
  • Shimizu, Chihiro
  • Watanabe, Tsutomu

Abstract

Fluctuations in housing prices have substantial economic impacts. Thus, it is essential to develop housing price indexes that can adequately capture housing market trends. However, construction of such indexes is very difficult due to the fact that residential properties are heterogeneous and do not remain at constant quality over time due to renovations and depreciation of the structure. In order to improve the quality of housing price statistics Eurostat published the Residential Property Price Indices Handbook in 2012. The present paper discusses alternative methods for obtaining constant quality housing price statistics and alternative data sources in the Japanese context.

Suggested Citation

  • Diewert, W. Erwin & Nishimura , Kiyohiko & Shimizu, Chihiro & Watanabe, Tsutomu, 2014. "Residential Property Price Indexes for Japan: An Outline of the Japanese Official RPPI," Economics working papers erwin_diewert-2014-17, Vancouver School of Economics, revised 27 Mar 2014.
    • Handle: RePEc:ubc:bricol:erwin_diewert-2014-17
    as

    Download full text from publisher

    File URL: http://www.economics.ubc.ca/files/2014/03/pdf_paper_erwin-diewert-14-05-RPPI.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2004. "Identification and Estimation of Hedonic Models," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 60-109, February.
    2. Ivancic, Lorraine & Erwin Diewert, W. & Fox, Kevin J., 2011. "Scanner data, time aggregation and the construction of price indexes," Journal of Econometrics, Elsevier, vol. 161(1), pages 24-35, March.
    3. Gatzlaff, Dean H. & Haurin, Donald R., 1998. "Sample Selection and Biases in Local House Value Indices," Journal of Urban Economics, Elsevier, vol. 43(2), pages 199-222, March.
    4. Genesove, David & Mayer, Christopher J, 1997. "Equity and Time to Sale in the Real Estate Market," American Economic Review, American Economic Association, vol. 87(3), pages 255-269, June.
    5. Gyourko, Joseph & Saiz, Albert, 2004. "Reinvestment in the housing stock: the role of construction costs and the supply side," Journal of Urban Economics, Elsevier, vol. 55(2), pages 238-256, March.
    6. W. Erwin DIEWERT & Jan de HAAN & Rens HENDRIKS, 2011. "The Decomposition of a House Price Index into Land and Structures Components: A Hedonic Regression Approach," The Valuation Journal, The National Association of Authorized Romanian Valuers, vol. 6(1), pages 58-105.
    7. David Genesove & Christopher Mayer, 2001. "Loss Aversion and Seller Behavior: Evidence from the Housing Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1233-1260.
    8. McMillen, Daniel P., 2008. "Changes in the distribution of house prices over time: Structural characteristics, neighborhood, or coefficients?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 573-589, November.
    9. Clapp, John M & Giaccotto, Carmelo, 1998. "Price Indices Based on the Hedonic Repeat-Sales Method: Application to the Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 5-26, January.
    10. Clapp, John M & Giaccotto, Carmelo, 1992. "Estimating Price Trends for Residential Property: A Comparison of Repeat Sales and Assessed Value Methods," The Journal of Real Estate Finance and Economics, Springer, vol. 5(4), pages 357-374, December.
    11. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    12. Donald R. Haurin & Jessica L. Haurin & Taylor Nadauld & Anthony Sanders, 2010. "List Prices, Sale Prices and Marketing Time: An Application to U.S. Housing Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(4), pages 659-685, Winter.
    13. Clapp, John M., 1980. "The elasticity of substitution for land: The effects of measurement errors," Journal of Urban Economics, Elsevier, vol. 8(2), pages 255-263, September.
    14. Bradford Case & Henry O. Pollakowski & Susan M. Wachter, 1991. "On Choosing Among House Price Index Methodologies," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 286-307, September.
    15. John R. Knight & C. F. Sirmans & Geoffrey K. Turnbull, 1998. "List Price Information in Residential Appraisal and Underwriting," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 59-76.
    16. Jan de Haan & Frances Krsinich, 2014. "Scanner Data and the Treatment of Quality Change in Nonrevisable Price Indexes," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 32(3), pages 341-358, July.
    17. Karl E. Case & Robert J. Shiller, 1987. "Prices of single-family homes since 1970: new indexes for four cities," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 45-56.
    18. Marcus T. Allen & William H. Dare, 2004. "The Effects of Charm Listing Prices on House Transaction Prices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(4), pages 695-713, December.
    19. McMillen, Daniel P., 2003. "The return of centralization to Chicago: using repeat sales to identify changes in house price distance gradients," Regional Science and Urban Economics, Elsevier, vol. 33(3), pages 287-304, May.
    20. Bourassa, Steven C. & Hoesli, Martin & Sun, Jian, 2006. "A simple alternative house price index method," Journal of Housing Economics, Elsevier, vol. 15(1), pages 80-97, March.
    21. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    22. Thorsnes, Paul, 1997. "Consistent Estimates of the Elasticity of Substitution between Land and Non-Land Inputs in the Production of Housing," Journal of Urban Economics, Elsevier, vol. 42(1), pages 98-108, July.
    23. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
    24. repec:dau:papers:123456789/6486 is not listed on IDEAS
    25. Davis, Morris A. & Heathcote, Jonathan, 2007. "The price and quantity of residential land in the United States," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2595-2620, November.
    26. Marc K. Francke & Gerjan A. Vos, 2004. "The Hierarchical Trend Model for Property Valuation and Local Price Indices," The Journal of Real Estate Finance and Economics, Springer, vol. 28(2_3), pages 179-208, March.
    27. Daniel P. McMillen & Paul Thorsnes, 2006. "Housing Renovations and the Quantile Repeat-Sales Price Index," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 34(4), pages 567-584, December.
    28. K. Chau & S. Wong & C. Yiu, 2005. "Adjusting for Non-Linear Age Effects in the Repeat Sales Index," The Journal of Real Estate Finance and Economics, Springer, vol. 31(2), pages 137-153, September.
    29. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    30. Eurostat, 2013. "Handbook on Residential Property Prices Indices," World Bank Publications - Books, The World Bank Group, number 17280.
    31. Allen C. Goodman & Thomas G. Thibodeau, 1998. "Dwelling Age Heteroskedasticity in Repeat Sales House Price Equations," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(1), pages 151-171, March.
    32. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    33. Engelhardt, Gary V., 2003. "Nominal loss aversion, housing equity constraints, and household mobility: evidence from the United States," Journal of Urban Economics, Elsevier, vol. 53(1), pages 171-195, January.
    34. Chihiro Shimizu & Kiyohiko Nishimura, 2007. "Pricing Structure in Tokyo Metropolitan Land Markets and its Structural Changes: Pre-bubble, Bubble, and Post-bubble Periods," The Journal of Real Estate Finance and Economics, Springer, vol. 35(4), pages 475-496, November.
    35. Dorsey, Robert E. & Hu, Haixin & Mayer, Walter J. & Wang, Hui-chen, 2010. "Hedonic versus repeat-sales housing price indexes for measuring the recent boom-bust cycle," Journal of Housing Economics, Elsevier, vol. 19(2), pages 75-93, June.
    36. Chihiro Shimizu & Kiyohiko G. Nishimura & Yasushi Asami, 2004. "Search And Vacancy Costs In The Tokyo Housing Market: Attempt To Measure Social Costs Of Imperfect Information," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 16(3), pages 210-230, November.
    37. Schwann, Gregory M, 1998. "A Real Estate Price Index for Thin Markets," The Journal of Real Estate Finance and Economics, Springer, vol. 16(3), pages 269-287, May.
    38. Raphael W. Bostic & Stanley D. Longhofer & Christian L. Redfearn, 2007. "Land Leverage: Decomposing Home Price Dynamics," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(2), pages 183-208, June.
    39. Shimizu Chihiro & Nishimura Kiyohiko G. & Watanabe Tsutomu, 2010. "Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 792-813, December.
    40. Deng, Yongheng & McMillen, Daniel P. & Sing, Tien Foo, 2012. "Private residential price indices in Singapore: A matching approach," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 485-494.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Diewert, Erwin & Shimizu, Chihiro, 2015. "Residential Property Price Indices For Tokyo," Macroeconomic Dynamics, Cambridge University Press, vol. 19(8), pages 1659-1714, December.
    2. Shimizu, Chihiro & Nishimura, Kiyohiko G. & Watanabe, Tsutomu, 2016. "House prices at different stages of the buying/selling process," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 37-53.
    3. Shimizu Chihiro & Nishimura Kiyohiko G. & Watanabe Tsutomu, 2010. "Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(6), pages 792-813, December.
    4. W. Erwin Diewert & Chihiro Shimizu, 2022. "Residential Property Price Indexes: Spatial Coordinates Versus Neighborhood Dummy Variables," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(3), pages 770-796, September.
    5. Diewert, W. Erwin & Shimizu, Chihiro, 2016. "Hedonic regression models for Tokyo condominium sales," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 300-315.
    6. Mick Silver, 2016. "How to Better Measure Hedonic Residential Property Price Indexes," IMF Working Papers 2016/213, International Monetary Fund.
    7. Burnett-Isaacs,, Kate & Diewert, Erwin & Huang, Ning, 2017. "Alternative Approaches for Resale Housing Price Indexes," Microeconomics.ca working papers erwin_diewert-2017-6, Vancouver School of Economics, revised 08 May 2017.
    8. Erwin Diewert & Chihiro Shimizu, 2017. "Alternative Approaches to Commercial Property Price Indexes for Tokyo," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(3), pages 492-519, September.
    9. Erwin Diewert & Chihiro Shimizu, 2020. "Alternative Land‐Price Indexes for Commercial Properties in Tokyo," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 784-824, December.
    10. W. Erwin Diewert & Kiyohiko G. Nishimura & Chihiro Shimizu & Tsutomu Watanabe, 2020. "Measuring the Services of Durables and Owner Occupied Housing," Advances in Japanese Business and Economics, in: Property Price Index, chapter 0, pages 223-298, Springer.
    11. W. Erwin Diewert & Kiyohiko G. Nishimura & Chihiro Shimizu & Tsutomu Watanabe, 2020. "The System of National Accounts and Alternative Approaches to the Construction of Commercial Property Price Indexes," Advances in Japanese Business and Economics, in: Property Price Index, chapter 0, pages 181-219, Springer.
    12. Jing Wu & Yongheng Deng & Hongyu Liu, 2014. "House Price Index Construction in the Nascent Housing Market: The Case of China," The Journal of Real Estate Finance and Economics, Springer, vol. 48(3), pages 522-545, April.
    13. Shimizu, Chihiro & Karato, Koji, 2016. "Property Price Index Theory and Estimation: A Survey," HIT-REFINED Working Paper Series 34, Institute of Economic Research, Hitotsubashi University.
    14. Marc K. Francke & Alex Minne, 2017. "The Hierarchical Repeat Sales Model for Granular Commercial Real Estate and Residential Price Indices," The Journal of Real Estate Finance and Economics, Springer, vol. 55(4), pages 511-532, November.
    15. Ghysels, Eric & Plazzi, Alberto & Valkanov, Rossen & Torous, Walter, 2013. "Forecasting Real Estate Prices," Handbook of Economic Forecasting, in: G. Elliott & C. Granger & A. Timmermann (ed.), Handbook of Economic Forecasting, edition 1, volume 2, chapter 0, pages 509-580, Elsevier.
    16. Denis Conniffe & David Duffy, 1999. "Irish House Price Indices — Methodological Issues," The Economic and Social Review, Economic and Social Studies, vol. 30(4), pages 403-423.
    17. Robert J. Hill & Alicia N. Rambaldi & Michael Scholz, 2021. "Higher frequency hedonic property price indices: a state-space approach," Empirical Economics, Springer, vol. 61(1), pages 417-441, July.
    18. Steven C. Bourassa & Donald R. Haurin & Jessica L. Haurin & Martin Hoesli & Jian Sun, 2009. "House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 259-278, June.
    19. Nicodemo, Catia & Raya, Josep Maria, 2012. "Change in the distribution of house prices across Spanish cities," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 739-748.
    20. Zhang, Lei & Yi, Yimin, 2017. "Quantile house price indices in Beijing," Regional Science and Urban Economics, Elsevier, vol. 63(C), pages 85-96.

    More about this item

    Keywords

    House price indexes; hedonic price indexes; repeat sales price indexes; aggregation bias; housing depreciation; land and structure components; flexibl;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ubc:bricol:erwin_diewert-2014-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Maureen Chin (email available below). General contact details of provider: http://www.economics.ubc.ca/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.