Examining the vintage effect in hedonic pricing using spatially varying coefficients models: a case study of single-family houses in the Canton of Zurich

Swiss Journal of Economics and Statistics

Jakob A. Dambon¹  Stefan S. Fahrländer²  Manuel Lehner²  Anna Zimmermann²  Saira Karlen²  Jaron Schlesinger²  Fabio Sigrist³ 

[1] Department of Mathematics, University of Zurich, Winterthurerstrasse 190, 8057, Zurich, Switzerland;Institute of Financial Services Zug (IFZ), Lucerne University of Applied Sciences and Arts, Suurstoffi 1, 6343, Rotkreuz, Switzerland;Fahrländer Partner Raumentwicklung, Seebahnstrasse 89, 8003, Zurich, Switzerland;Institute of Financial Services Zug (IFZ), Lucerne University of Applied Sciences and Arts, Suurstoffi 1, 6343, Rotkreuz, Switzerland;

关键词: Gaussian process;    Spatial statistics;    Real estate;    Mass appraisal;    C31;    C53;    R31;    R32;   

DOI  :  10.1186/s41937-021-00080-2

来源: Springer

【 摘 要 】

This article examines the spatially varying effect of age on single-family house (SFH) prices. Age has been shown to be a key driver for house depreciation and is usually associated with a negative price effect. In practice, however, there exist deviations from this behavior which are referred to as vintage effects. We estimate a spatially varying coefficients (SVC) model to investigate the spatial structures of vintage effects on SFH pricing. For SFHs in the Canton of Zurich, Switzerland, we find substantial spatial variation in the age effect. In particular, we find a local, strong vintage effect primarily in urban areas compared to pure depreciative age effects in rural locations. Using cross validation, we assess the potential improvement in predictive performance by incorporating spatially varying vintage effects in hedonic models. We find a substantial improvement in out-of-sample predictive performance of SVC models over classical spatial hedonic models.

【 授权许可】

CC BY