THE USE OF LOCATION VARIABLES IN A MIX-ADJUSTED INDEX FOR DUBLIN HOUSE PRICES. ESRI Working Paper No. 138, 2001

Duffy, David (2001) THE USE OF LOCATION VARIABLES IN A MIX-ADJUSTED INDEX FOR DUBLIN HOUSE PRICES. ESRI Working Paper No. 138, 2001. [Working Paper]

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Abstract

The rapid increase in house prices that has occurred in Ireland in recent years has focused attention on the methodology used to measure the change. Traditionally measurement of the change in Irish house prices has been based on an average price compiled by the Department of the Environment. While this is the simplest method it does suffer the drawback that a change in the type of houses sold in a particular period will influence the mean and so the measure may reflect this change rather than an actual change in price. Recognition of this has lead to a considerable literature on how better to measure changes in house prices. In recent times a number of alternative measures have emerged for the Irish market based on hedonic regression techniques, whereby the price of a commodity is the function of the commodity’s characteristics. This methodology standardises for changes in the mix of properties and so should permit a more accurate record of how house prices have changed.

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