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An Empirical Examination of the Stability of Housing Price Equations Over Time
Author(s) -
Mark Jonathan H.
Publication year - 1983
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00298
Subject(s) - neighbourhood (mathematics) , economics , econometrics , series (stratigraphy) , stability (learning theory) , simultaneous equations , instability , mathematics , mathematical analysis , physics , geology , mechanics , computer science , differential equation , paleontology , machine learning
This study investigates the extent to which the coefficients of housing price equations are stable over time. Using annual data from 1959 to 1979 for a large neighbourhood in Vancouver, British Columbia, a series of twenty‐four housing price equations is estimated. The estimated coefficients exhibit substantial instability over the period. Further, prediction errors are generally minimized for a given year when the coefficients estimated for that year are used to predict. The results strongly suggest that such equations should be recalibrated each year.