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Construction of a Spatial Housing Price Index by Estimating an Almost Ideal Demand System
Author(s) -
Iturra Víctor,
Paredes Dusan
Publication year - 2014
Publication title -
tijdschrift voor economische en sociale geografie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 55
eISSN - 1467-9663
pISSN - 0040-747X
DOI - 10.1111/tesg.12067
Subject(s) - almost ideal demand system , index (typography) , price index , econometrics , economics , ideal (ethics) , welfare , microeconomics , computer science , production (economics) , market economy , philosophy , epistemology , world wide web
Abstract The aim of this paper is to build, for the first time, a spatial housing price index for the Chilean communities. The first step is to recover hedonic prices of three housing attributes by estimating a mixed index model using a generalised method of moments ( GMM ) procedure. Second, a censored almost ideal demand system is estimated to build expenditures for every community and to compare them among different spatial units, while maintaining a constant utility level. Using micro data from the 2009 CASEN survey, we show that there are important differences in the expenditure of a consumer in Santiago to access the same level of welfare in another community in the country and there are important differences in housing prices among Chilean communities