Estimating house price appreciation: A comparison of methods

Crone, Theodore M.; Voith, Richard

doi:10.1016/1051-1377(92)90007-d

Cited by 75 publications

(45 citation statements)

References 12 publications

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“…Our results clearly indicate that implicit prices are unstable, which thus justifies the crosssectional approach. The formal test of stable implicit prices has previously been employed for the same purpose by Crone and Voith (1992), Meese and Wallace (1997) and others. Like them, we reject the temporal stability of the hedonic prices on housing attributes.…”

Section: Resultsmentioning

confidence: 99%

Revisiting the Past and Settling the Score: Index Revision for House Price Derivatives

Clapham

Englund

Quigley

et al. 2006

Real Estate Economics

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Section: Resultsmentioning

confidence: 99%

Revisiting the Past and Settling the Score: Index Revision for House Price Derivatives

Clapham

Englund

Quigley

et al. 2006

Real Estate Economics

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“…Crone et al [2] compared five methods of estimating housing appreciation rates and found the repeat sales method to be the most accurate. The hypothesis considered is that the smelter has no effect on housing appreciation rates.…”

Section: Estimation Resultsmentioning

confidence: 99%

“…[22], and Thayer et al [23] have consistently found that proximity to hazardous waste sites and other locally undesirable land uses (LULUs) has a negative impact on property values. 2 The appreciation rate of house prices can be used to calculate the user cost of owneroccupied housing. It is also used to compare the rate of return on investment in residential properties to other types of assets.…”

Section: It Previous Studiesmentioning

confidence: 99%

“…If the price adjustment after the cleanup of a hazardous waste site is gradual, as opposed to immediate and permanent, then the cost to the residential property owner cannot be measured immediately after cleanup. 2 The duration of stigma has significant legal ramifications. When the courts award stigma damages based on unrealized losses in property values, they are implicitly assuming that stigma damage is permanent and does not change over time.…”

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confidence: 99%

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Hazardous waste sites and housing appreciation rates

McCluskey

Rausser

2003

Journal of Environmental Economics and Management

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The dynamic effect of a hazardous waste site is analyzed by investigating the causal relationship between housing appreciation rates and house location in relation to a hazardous waste site using resale data from individual sales transactions in Dallas County, Texas. The results indicate that in the period in which the hazardous waste site was identified and cleanup occurred, residential property owners in close proximity to the hazardous waste site experienced lower housing appreciation rates. In the first postcleanup period, they gained some of the lost ground with a higher appreciation rate. In a subsequent post-cleanup period, their appreciation fell in line with property owners whose properties are located farther away from the hazardous waste site. This suggests that a long-run equilibrium has been reached since appreciation rates were not significantly different across the Dallas housing market in the second post-cleanup period. Although the results indicate that adjustment takes time, an equilibrium is eventually reached for the houses in this repeat sales data set. An important implication of our analysis is that since the post-cleanup recovery was not immediate, property owners should be compensated for their loss of liquidity.Key words: housing appreciation rates, hazardous waste sites.The public's increasing awareness of environmental risks is reflected in the negative impact of environmental contamination on property values in the real estate market.Although the effects of environmental contamination on property values have been studied, the current body of literature on the effects of locally undesirable land uses does not address the adjustment of property values to the discovery and cleanup of environmental contamination. Kiel et al. [9] come the closest to analyzing this issue.They examine the effect of an incinerator siting on housing appreciation rates. However, their study is limited to siting and operation and does not consider any time period after the incinerator has been shut down or removed. In contrast, this paper examines the impact of environmental contamination and cleanup on residential property value appreciation rates by analyzing data from before identification of the hazardous waste site and before, during, and after cleanup has been completed. Consequently, it is possible to empirically investigate the longer-run market adjustment.Stigma is a negative attribute of real estate acquired by the discovery of contamination and reflected in price Elliot-Jones [4].· Using a theoretical model with external economies and adjustment costs, McCluskey [16] shows that both temporary stigma and permanent stigma are possible equilibrium outcomes after discovery and cleanup of a hazardous waste site. If the price adjustment after the cleanup of a hazardous waste site is gradual, as opposed to immediate and permanent, then the cost to the residential property owner cannot be measured immediately after cleanup. 2The duration of stigma has significant legal ramifications. When the cour...

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“…Because house, home site, and neighborhood characteristics are relatively stable over time for any individual home, many of those characteristics need not be included in the repeat sales model, thereby increasing the degrees of freedom and allowing sample size requirements to be significantly lower and coefficient estimates to be more efficient (Crone and Voith, 1992). A repeat sales analysis is not necessarily preferred over a traditional hedonic model, but is rather an alternative analysis approach that can be used to test the robustness of the earlier results (for further discussion see Jackson, 2003).…”

Section: Repeat Sales Models and Environmental Disamenities Literaturementioning

confidence: 99%

The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis

Hoen¹,

Wiser²,

Cappers³

et al. 2009

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With wind energy expanding rapidly in the U.S. and abroad, and with an increasing number of communities considering wind power development nearby, there is an urgent need to empirically investigate common community concerns about wind project development. The concern that property values will be adversely affected by wind energy facilities is commonly put forth by stakeholders. Although this concern is not unreasonable, given property value impacts that have been found near high voltage transmission lines and other electric generation facilities, the impacts of wind energy facilities on residential property values had not previously been investigated thoroughly. The present research collected data on almost 7,500 sales of singlefamily homes situated within 10 miles of 24 existing wind facilities in nine different U.S. states. The conclusions of the study are drawn from eight different hedonic pricing models, as well as both repeat sales and sales volume models. The various analyses are strongly consistent in that none of the models uncovers conclusive evidence of the existence of any widespread property value impacts that might be present in communities surrounding wind energy facilities.

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Estimating house price appreciation: A comparison of methods

Cited by 75 publications

References 12 publications

Revisiting the Past and Settling the Score: Index Revision for House Price Derivatives

Revisiting the Past and Settling the Score: Index Revision for House Price Derivatives

Hazardous waste sites and housing appreciation rates

The Impact of Wind Power Projects on Residential Property Values in the United States: A Multi-Site Hedonic Analysis

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