Place to Place Indexes of the Price of Housing: Some New Estimates and a Comparative Analysis

摘要

Variation in the cost of comparable housing among 39 Standard Metropolitan Statistical Areas (SMSA) is examined to provide new, constant - quality cross - sectional indexes of the price of housing. The indexes are calculated using Annual Housing Survey data from 1974 and 1975 and are for both owner - occupied and renter - occupied units. The methods used to make inferences about the price per unit of housing services are hedonic indexes, based on the assumptions that a housing unit is not a single heterogeneous unit, but rather a bundle of dwelling characteristics and each of these characteristics has its own price which can be estimated by multivariate regression analysis, and the Bureau of Labor Statistics (BLS) method. In this second method, a particular type of housing bundle is specified; then all dwellings within a particular SMSA with similar characteristics are selected, and the average rent of the selected units is computed. The procedure is repeated in other SMSA's, using the same set of selected housing characteristics. The resulting schedule of average rents constitutes the BLS - type rental price index. Major findings derived from constructing these two types of indexes are: (1) significant variation exists in housing prices across SMSA's, using both index procedures; (2) the indexes generally agree on which SMSA's have more and less expensive housing and are sensitive to changes; and (3) the hedonic index is relatively insensitive to the metropolitan and intrametropolitan location of the reference bundle, and the inclusion or exclusion of neighborhood characteristics. Thesappendix provides a hedonic variables list; a bibliography is included.