Adjusting for Non-Linear Age Effects in the Repeat Sales Index

摘要: A true constant quality real estate price index should measure the general change in level free from any over time. In recent years, repeat-sales method has been widely used to construct property indices. Since buildings depreciate time, a simple would underestimate growth prices. The major problem of controlling effects age model arises exact multicollinearity between variable and time dummy variables. this study, we derive solution that is theoretically sound practical by allowing be non-linear. case leasehold properties, further incorporated interest rates into because on prices depend rates. sample residential units Hong Kong sold more than once Quarter 2 1991 1 2001 (more 11,000 repeat sales pairs) are for empirical analysis.