Authors : B.K. Ajide and I.O. Kareem
Abstract: Quite a large number of housing studies have been estimated with hedonic pricing methodology with majority of these studies imposing a priori restrictions on the functional form. However, estimating the composite housing price through imposition of a prior restriction may lead to model misspecification, erroneous and inconsistent estimates. In specifying a model, it is germane to derive information from the data itself instead of imposing an untested restriction in advance. It is against this backdrop that this study estimated the relationship between housing price and its associated characteristics using a flexible model of Box-Cox transformation framework without a priori restriction. With this framework, the importance of structural housing characteristics that were more pronounced than any other housing traits was revealed. Therefore, it is important for both public and private operators in the housing market to give preference to structural, neighbourhood and locational characteristics of housing since they have great influence on housing price.
B.K. Ajide and I.O. Kareem, 2010. Hedonic Analysis of Residential Housing Market in a Third World City: A Preliminary Investigation. The Social Sciences, 5: 520-524.