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Commonly used rent indices are based on average developments or expert opinions. Such indices often suffer from compositional biases or low data coverage. The purpose of this paper is to overcome these challenges using the authors' approach.

The authors construct a quality-adjusted rent index for the office market in Oslo using detailed data from 14,171 rental contracts.

The authors show that compositional biases can have a large impact on rental price developments. By adding building-fixed effects to a standard hedonic regression model, the authors show that the explanatory power increases considerably. Furthermore, indices excluding location-specific information, or which include less granular location controls than at the building level, portray quite a different picture of rent developments than indices that do take this into account. The authors also exploit information on contract signature date and find that a more timely detection of turning points can be achieved by using the signature date instead of the more typically used start date of the lease.

The study is confined to Norwegian data, and an avenue for future research would be to explore if similar results are obtained for other countries. A weakness with the paper is that authors' do not observe quality changes over time, such as renovation. Controlling for time-varying and unit-specific attributes in hedonic models for the commercial real estate (CRE) market would be useful to purge indices further for compositional effects and unobserved heterogeneity. While the authors do control for building-fixed effects, there are additional variations within a building (floor, view, sunlight, etc.) that the authors do not capture. Studies that could control for this would certainly be welcome, both in order to estimate the value of such amenities and to see how it affects estimated rent developments. Another promising avenue for future research is to link data on rental contracts in the CRE market with firm-specific information in order to explore how firm profitability and liquidity may affect rental contracts.

The authors show that the hedonic index yields a sharper fall in rents after the global financial crisis and more muted developments in the period between 2013 and 2015 than the average rent index. The results show that rents have followed their estimated equilibrium closely and have re-adjusted quickly in periods of deviation. From a financial stability perspective, the risk of a sharp fall in rents is reduced because rents often are in line with their fundamentals.

The authors find that a more timely detection of turning points can be achieved by using information on the signature date. This is an important finding. The financial system is heavily exposed toward CRE, and timely detection of turning points is critical for policymakers.

The financial system is heavily exposed toward the commercial real estate market and timely detection of turning points is of major importance to policymakers. Finally, the authors use our quality-adjusted rent index as the dependent variable in an error correction model. The authors find that employment and stock of offices are important explanatory variables. Moreover, the results show that rents have followed their estimated equilibrium path.

This study aims to estimate the quality-adjusted changes in residential mobile consumer prices by controlling for the changes in the relevant service characteristics and quality, in a case study on Hungary between 2015 and 2021; compare the results with changes measured by the traditionally calculated official telecommunications price index of the Statistical Office; and discuss separating the hedonic price changes from the effect of a specific government intervention that occurred in Hungary, namely, the significant reduction in the value added tax rate (VAT) levied on internet services.

Since the price of commercial mobile offers does not directly reflect the continuous improvements in service characteristics and functionalities over time, the price changes need to be adjusted for changes in quality. The authors use hedonic regression analysis to address this issue.

The results show significant hedonic price changes over the observed seven-year period of over 30%, which turns out to be primarily driven by the significant developments in the comprising service characteristics and not the VAT policy change.

This paper contributes to the literature on hedonic price analyses on complex telecommunications service plans and enhances this methodology by using weights and analysing the content-related features of the mobile packages.

This study aims to show how hedonic methods can be used to compare the performance of the public and private sector housing markets in Costa Rica.

Hedonic price indexes are computed using the adjacent-period method. Average housing quality is measured by comparing hedonic and median price indexes. The relative performance of the public and private sector residential construction is compared by estimating separate hedonic models for each sector. A private sector price is then imputed for each house built in the public sector, and a public sector price is imputed for each house built in the private sector.

The real quality-adjusted price of private housing rose by 12 per cent between 2000 and 2013, whereas the price of private housing rose by 9 per cent. The average quality of private housing rose by 45 per cent, whereas that of public housing fell by 18 per cent. Nevertheless, the hedonic imputation analysis reveals that public housing could not be produced more cheaply in the private sector.

The quality of public housing has declined over time. The hedonic analysis shows that the decline is not because of a lack of competition between construction firms in the public sector. An alternative demand side explanation is provided.

This study applies hedonic methods in novel ways to compare the relative performance of the public and private housing sectors in Costa Rica. The results shed new light on the effectiveness of public sector housing programs.

The purpose of this paper is to address a key issue fundamental to the operation of land and housing markets, that is, the relationship between land and house prices. The study identifies possible causation between established house and vacant allotment prices using the metropolitan area of Adelaide, Australia as a case study.

A key outcome of the study is the construction of a Site Adjusted Land Price Index against which a Quality Adjusted House Price Index is compared.

The results show that there is a lagged effect of land prices on house prices and that this is significant at an interval of eight lag periods. The results also imply that the lead lag relationship between established house and vacant allotment prices is not unidirectional. This suggests that, while a change in house prices leads to a change in land prices in the short-run, the long-run position is for increasing land prices to lead to a delayed increase in house prices.

Rising house prices do not simply and solely reflect a shortage of land. There are suggested effects both immediate from house to land and delayed from land to house, particularly in a rising market.

The lead lag relationships of both indexes are tested using Granger causality estimates to assess whether theoretical Ricardian concepts still hold in a modern urban land market.

The aim of this paper is to present estimation results of hedonic price models as well as housing price indices for the Warsaw secondary market.

Three direct methods of constructing a hedonic price index and four indices that allow for quality adjustment are presented. The paper also discusses theoretical issues related to the estimation and interpretation of hedonic models.

It is shown that the imputation and the time dummy variable indices are subject to less variation than the characteristic price index. It is also shown that in comparison to the mean and the median, hedonic indices are less variable, which can be interpreted as partial control for quality changes in dwellings sold.

As this research project represents one of the first attempts of hedonic modelling applied to the Polish housing market, its results may be employed by appraisers to gain insight into behaviour of the Warsaw housing market. Practical implications focus on reliable measurement of house price dynamics in Poland. This paper supplies an appropriate methodology for addressing this question and offers empirical solutions.

Employment of hedonic models for construction of quality‐adjusted housing price indices has not yet been explored in Poland. The theoretical and practical aspects of hedonic indices presented in the paper open promising directions for the development of Polish statistics of real estate prices.

Aging in Japan is advancing faster than in other major developed nations, and this is expected to have substantial effects on the country’s economic systems, including its social security system. What kind of effect will the falling birth rate, aging society and declining population have on the real estate market? Will the often mentioned real estate price asset meltdown really occur? The purpose of this paper is to address these questions by investigating how much demographic factors affected real estate prices in Japan and the USA.

The authors use regional panel data for Japan and the USA real estate prices and estimate the effects of demographic factors, such as dependency ratio, i.e. the ratio of population aged 65+ to population aged 20-64. For Japan, as no region-by-region quality-adjusted housing price indexes covering the entire country exist, data are constructed by conducting quality adjustment using hedonic regression.

Both in Japan and the USA, real estate prices in a region are inversely correlated with the old age dependency ratio in that region, and positively correlated with the total number of population in that region. The demographic factor had a greater impact on real estate prices in Japan than in the USA. For Japan, it was also found that demographic impact on land prices will be −2.4 per cent per year in 2012-2040, while it was −3.7 per cent per year in 1976-2010, suggesting that aging will continue to have downward pressure on land prices over the next 30 years, although the demographic impact will be slightly smaller than it was in 1976-2010, as the old age dependency ratio will not increase as much as it did before.

Japan’s regional panel data are newly constructed based on a hedonic approach. Analyzing the effect of dependency ratio for Japan and the USA panel data is a new challenge. Forecasting future impact of demographic factor on Japan’s land prices based on the population forecast is a new challenge.

This paper examines commonly used property price indices in several Commonwealth countries. It finds that many of the measures may be flawed owing to two issues relating to the index construction methodology: the quality change problem and the choice of an index number algorithm. Using data that comprises the universe of transactions for the Singapore residential market, alternative indices based on more rigourous estimation models are constructed that aim to mitigate these problems. When compared to the official benchmark indices, deviations in time series price behaviour are evident particularly for short‐run dynamics. A key implication of the results is the importance of explicitly recognizing the biases that can arise from using extant indices. Otherwise, a reliance on flawed index signals for decision‐making may result in distorted allocations.

The purpose of this paper is to decompose and measure the microstructure of property investment returns for Tokyo’s residential property markets in as much detail as possible in comparison with office market.

Using enterprise value data for property investment trust companies composed of share prices available on capital markets, this study proposed a method of estimating property investment returns corresponding to changes in capital markets, and clarified the distortion in capitalization rate that are formed based on property appraisal prices.

The results for residential property showed that as building floor space increased, income and price increased while the discount rate decreased. In particular, a higher return could be obtained from office property than residential property by investing in larger-scale properties. Building age lowered asset price and income for both residential and office property, especially for residential property.

In Japan, investors believe that investment returns are high for properties close to the city centre, relatively new properties and those with large design or floor space. Therefore, this study first measured how asset prices, income and asset price–income ratios that comprise property investment returns change based on differences in these property characteristics. Second, the reliability/distortion of information that can be observed on the property investment market was measured. Furthermore, there was a significant divergence between discount rates and risk premiums formed by asset or space markets versus capital markets.

The differences of discount rate and risk premium formed by asset markets versus capital markets indicate that appraisal prices have biases. Thus, when it comes to property investment decisions, it is essential to make active use not just of property investment returns based on appraisal prices formed by asset markets but also information formed by capital markets.

A greater difference was generated in a shrinking market, suggesting that analysing property returns estimated on asset market information alone could lead to erroneous investment decisions.

This research is the first to use the enterprise value data from real estate investment trust companies composed of share prices available on capital markets for calculating discount rate and risk premium in property market.

The repeat sales house price index (HPI) has been widely used to measure house price movements on the assumption that the quality of properties does not change over time. This study aims to develop a novel improvement-value adjusted repeat sales (IVARS) HPI to remedy the bias owing to the constant-quality assumption.

This study compares the performance of the IVARS model with the traditional hedonic price model and the repeat sales model by using half a million repeated sales pairs of housing transactions in the Auckland Region of New Zealand, and by a simulation approach.

The results demonstrate that using the information on improvement values from mass appraisal can significantly mitigate the time-varying attribute bias. Simulation analysis further reveals that if the improvement work done is not considered, the repeat sales HPI may be overestimated by 2.7% per annum. The more quality enhancement a property has, the more likely it is that the property will be resold.

This novel index may have the potential to enable the inclusion of home condition reporting in property value assessments prior to listing open market sales.

The novel IVARS index can help gauge house price movements with housing quality changes.

The purpose of this paper is to test whether temporal aggregation matters when constructing hedonic house price indices for developing markets using Ghana as a case study.

Monthly, quarterly, semi-yearly and yearly hedonic price indices are constructed and six null hypotheses are tested using the F-ratios to examine the temporal aggregation effect.

The results show that temporal aggregation may not be a serious issue when constructing hedonic house price indices for developing markets as a result of the smaller sample size which these markets normally have. At even 10 per cent significance level, none of the F-ratios estimated is statistically significant. Analysis of the mean returns and volatilities reveal that indices constructed at the lower level of temporal aggregation are very volatile, suggesting that the volume of transactions can affect the level of temporal aggregation, and so, the temporal aggregation level should not be generalised, as is currently observed in the literature.

The diversification importance of real estate and the introduction of real estate derivatives and home equity insurance as financial products call for the construction of robust and accurate real estate indices in all markets. While almost all empirical research recommends real estate price indices to be conducted at the lower level of temporal aggregation, these studies are largely conducted in developed markets where transactions take place frequently and large transaction databases exist. Unfortunately, little is known about the importance of temporal aggregation effect when constructing indices for developing real estate markets. This paper contributes to fill these gaps.