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Alternative Measures of Housing Prices: Research by Serra Erdur & Marc Prud’homme

Explore various shelter measures, user-cost alternatives, and NHPI results in housing price research conducted by Serra Erdur and Marc Prud’homme for the Ottawa Group in 2007. The study delves into hedonics, user-cost formulas, and alternative price index series for owned accommodation in Canada.

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Alternative Measures of Housing Prices: Research by Serra Erdur & Marc Prud’homme

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  1. House Price Indexes at Statistics Canada: Practices and Research Serra Erdur & Marc Prud’homme Prices Division Presented for the Ottawa Group October 11th, 2007

  2. Outline • Alternative measures of shelter (part 2) • Hedonics project (part 2) • The “New” NHPI USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  3. Part 1 • Alternative Measures of Shelter • User cost • No shelter USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  4. User-Cost Formula r : mortgage interest rate M : mortgage debt i : 5-year bond rate D : depreciation RC : recurring costs K : capital gains USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  5. Alternative Measures of Owned Accommodation Components USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  6. Canada Price Index Series for Owned Accommodation, 2000 Q1=100 USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  7. Canada Price Index Series for All Items, 2000Q1=100 113-116 107-109 USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  8. Annual Growth Rates for Alternative Concepts, 2000-2005 USER-COST ALTERNATIVE OOH RESULTS HEDONICS & RP NEW NHPI

  9. Part 2 • Hedonics and repeat sales USER-COST ALTERNATIVE OOH RESULTSHEDONICS & RP NEW NHPI

  10. Hedonic and RS Price Indices vs. NHPI for Ottawa, 1996-2007/05 USER-COST ALTERNATIVE OOH RESULTSHEDONICS & RP NEW NHPI

  11. Hedonic and RS Price Indices vs. NHPI for Ottawa, 1996-2005: Annual Growth Rates USER-COST ALTERNATIVE OOH RESULTSHEDONICS & RP NEW NHPI

  12. Land / Structure Split: Land Price Index for Ottawa, 1996=100 USER-COST ALTERNATIVE OOH RESULTSHEDONICS & RP NEW NHPI

  13. Part 3 • The “New” NHPI USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  14. The samples USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  15. Sample decay: Calgary USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  16. Sample decay: Toronto USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  17. New NHPI Results: Calgary USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  18. New NHPI Results: Calgary USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  19. New NHPI Results: Toronto USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  20. New NHPI Results: Toronto USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  21. The Workshop • Marion Steel - Guelph University: “I would choose the hedonic replacement, partly because it represents the least disruption from the current procedure. Points to consider in the future include investigating the issue of whether house models should be weighted by number of units sold.” • Tsur Somerville - UBC Centre for Urban Economics and Real Estate: “Any variant of a hedonic index will be an important improvement over the existing method.” USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  22. The Workshop • Paul Anglin - Guelph University “I think that there should be an emphasis on using a method that is easy to compute for two reasons: to make it easy to communicate to an outside audience and to produce robust estimates.” • François DesRosiers - Université Laval: “Turning to hedonics for revisiting the NHPI methodology is the best decision Statistics Canada could take. Considering though that a drawback of using this approach is the relatively small sample size available - between 130 (Toronto) and 38 (Calgary) new house sales -, I would suggest to compute the index for a given month “t” by pooling the samples of the three preceding months while resorting to some kind of moving average.” USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

  23. THANK YOU USER-COST ALTERNATIVE OOHRESULTSHEDONICS & RP NEW NHPI

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