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Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures

Title
Housing Prices in Tokyo: A Comparison of Hedonic and Repeat Sales Measures
Creator
Creator Name
Shimizu, Chihiro Shimizu, Chihiro
清水, 千弘 清水, 千弘
シミズ, チヒロ シミズ, チヒロ
Affiliation
Affiliation Name
Reitaku University
Creator Name
Nishimura, kiyohiko G. Nishimura, kiyohiko G.
西村, 清彦 西村, 清彦
ニシムラ, キヨヒコ ニシムラ, キヨヒコ
Affiliation
Affiliation Name
Bank of Japan
Creator Name
Watanabe, Tsutomu Watanabe, Tsutomu
渡辺, 努 渡辺, 努
ワタナベ, ツトム ワタナベ, ツトム
Affiliation
Affiliation Name
Hitotsubashi University
Editor
Contributor Name
日本経済の物価変動ダイナミクスの解明 = Understanding Inflation Dynamics of the Japanese Economy
Affiliation
Affiliation Name
Hitotsubashi University
Key Word
hedonic price index
repeat sales price index
aggregation bias
housing depreciation
JEL
C43
C81
R21
R31
Abstract
Do indexes of house prices behave differently depending on the estimation method? If so, to what extent? To address these questions, we use a unique dataset that we compiled from individual listings in a widely circulated real estate advertisement magazine. The dataset contains more than 470,000 listings of housing prices between 1986 and 2008, including the period of the housing bubble and its burst. We find that there exists a substantial discrepancy in terms of turning points between hedonic and repeat sales indexes, even though the hedonic index is adjusted for structural changes and the repeat sales index is adjusted in the way Case and Shiller suggested. Specifically, the repeat sales measure signals turning points later than the hedonic measure: for example, the hedonic measure of condominium prices bottomed out at the beginning of 2002, while the corresponding repeat sales measure exhibits a reversal only in the spring of 2004. This discrepancy cannot be fully removed even if we adjust the repeat sales index for depreciation.
Description
First Draft: May 21, 2009
This version: August 2, 2010
We would like to thank Erwin Diewert, David Fenwick, Peter von der Lippe, and participants at the 11th Ottawa Group Meeting held in Neuchﾆ atel, Switzerland for helpful comments on a preliminary draft. We also appreciate detailed comments from an anonymous referee and the editors of this journal. Nishimura’s contribution was made mostly before he joined the Policy Board. This research is a part of the projec entitled: Understanding Inflation Dynamics of the Japanese Economy, funded by JSPS Grant-in-Aid for Creative Scientific Research (18GS0101)
Publisher
Research Center for Price Dynamics, Institute of Economic Research, Hitotsubashi University
Issued Date
2010-08
Language
English(eng)
Resource Type
technical report
Version Type
NA
Is Part OfRelation -
Related Title
Working Paper Series ; No. 62
Is Replaced ByRelation -
Related Identifier
HDL
  http://hdl.handle.net/10086/18659
Relation
Related Title
This version has been revised. The new version is available at http://hdl.handle.net/10086/18659
Related Identifier
URI
  http://www.ier.hit-u.ac.jp/~ifd/
Physical Description
18 p.
Sponsorship
学術創成研究費 = Grant-in-Aid for Creative Scientific Research
Appears in Collections
Working Paper Series / Understanding Inflation Dynamics of the Japanese Economy
URL
https://hdl.handle.net/10086/18638
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