THE EXCHANGEABILITY OF HEDONIC PROPERTY PRICE STUDIES

Observations drawn from multiple markets are essential to the construction of indices of housing costs and to measures of demand for housing attributes. It is not evident when multiple markets exist or whether such markets exist for some attributes but not for others. We test for multiple markets by using Bayesian methods to assess the transferability (random exchangeability) of entire hedonic price expressions from one site and time to another, the transferability of hedonic price functions for particular attributes, and the degrees of similarity that hedonic price functions must have in order to be transferable. In our illustrations, price functions for structural housing attributes are generally transferable; prices for neighborhood attributes are not. Therefore, in our illustrations, the desired price indices and demand functions should be estimable for neighborhood attributes, but not for structural ones.