Heterogeneity in hedonic modelling of house prices: looking at buyers’ household profiles

• DOI: 10.1007/s10109-005-0011-8
• Publication Date: 2005-11-14T09:06:37Z
• Authors: Yan Kestens; Marius Thériault; François Des Rosiers
• Keywords: Hedonic Pricing; Property value; House price; Residential Property; Value (mathematics); Household income

This paper introduces household-level data into hedonic models in order to measure the heterogeneity of implicit prices regarding household type, age, educational attainment, income, and the previous tenure status of the buyers. Two methods are used for this purpose: a first series of models uses expansion terms, whereas a second series applies Geographically Weighted Regressions. Both methods yield conclusive results, showing that the marginal value given to certain property specifics and location attributes do vary regarding the characteristics of the buyer's household. Particularly, major findings concern the significant effect of income on the location rent as well as the premium paid by highly-educated households in order to fulfil social homogeneity.