Authors : Ajide Kazeem Bello and Alabi Moruf
Abstract: The age-long contentious issue in the housing literature concerning the use of hedonic pricing methodology borders on the choice of appropriate functional form to adopt in its estimation. Different types of functional forms-linear, semi-log and log-log-have haphazardly been applied in empirical studies on housing, most especially with reference to Sub-saharan African countries without any form of formal verifiable evidence to show for it. The void is filled by this study via the use of alternative functional forms. The results using Nigerian data however, provide additional evidence in support of earlier findings from the developed country on the superiority of semi-log specification over other functional forms. The policy relevance which could be drawn from this is that the use of an inappropriate functional form may result into formulating defective housing policy as well as inform wrong policy conclusions and recommendations.
Ajide Kazeem Bello and Alabi Moruf, 2010. Does the Functional Form Matter in the Estimation of Hedonic Price Model for Housing Market?. The Social Sciences, 5: 559-564.