New Method Improves Accuracy of Property Price Indices, Boosting Real Estate Transparency
Hedonic regressions help measure property prices accurately by considering changes in property quality. These regressions are widely used due to the availability of electronic data on property prices and characteristics. However, the accuracy of hedonic property price indices depends on the quality of the regression estimates. Official economic statistics lack technical support for diagnosing regression equations used in property price indices. Diagnostic measures and graphical plots are crucial for transparent and credible property price measurement. This article aims to provide practical help in addressing these econometric issues.