The Study Of Hedonic Housing Price Model

Recent years, the development of China still remains rapidly growth under the situationthat the world economic is not optimistic. The rapid development of real estate industrymakes an undeniable contribution to the fast economic growth in China, at the same time; itcreates a considerable of investment opportunities. The first step of investment is to evaluatethe project to determine whether it is a profitable or not. The evaluation of real estate is akind of general "pricing". It is absolutely different from the pricing in other fields. Theevaluation of real estate is a benchmark for the real value of real estate and it can provideprofessional advice for real estate investors. In the usual sense, pricing is determined by thebehavior of relevant investors, such as asking price and offer price. But to be more accurate,the evaluation of real estate aims to reveal its objective value through scientific analysis.This thesis mainly uses hedonic model to price the real estate. Because the price of realestate is influenced by many complicated factors, classification is needed. The factors whichhave an effect on the price of real estate are divided into three categories in this thesis:structural properties, neighborhood and location, and spatial effects. Considering the factthat if property samples are correlated with each other, the pricing results just taking itsattributes and characteristics into consideration would be biased, as a consequence, thisthesis pays special attention to the spatial effect between different adjacent properties.The principle work of this thesis is to discuss the impact of various factors on the realestate price, particularly; it studies the spatial effects between the houses with spatial errormodel, and corresponding interpretation and analysis about its effects are given. Firstly, thisthesis shows the impact of structure attributes on house price by hedonic model. Then theimpact of neighborhood and location is discussed. Finally, this thesis takes the spatial effectsinto consideration to evaluate the house price. Based on the research logic and conclusion,the research shows that though considering the relevant factors as much as possible toreduce the impact of omitted variables, to deal with the influence of spatial effect fromomitted variables, spatial error model may be better.