Housing Market in Malaga: An Application of the Hedonic Methodology

building with many floors (-1.03% or 2.093,56 €), also has negative effect on price. Concerning
the type of dwelling, apartments and studio flats are negatively valued by the market due to their
small size (-8.22% or 16.728,14 €).

Other attributes significantly valued by the market are proximity of the dwelling to the
seaside, less than 750 meters (13.5% or 27.466,94 €) and being no farther than 1500 meters
from downtown (7.24% or 14.736,17 €), given that Malaga city is monocentric.

If the dwelling is located in the most socioeconomically depressed district of the city,
district 5, the price falls drastically by 14.63%. As shown in Table 3, this fall is less dramatic in
other districts, where the fall is around 4%.

Finally, it is of note that, after estimating the elasticity of surface area price by a double
log regression with price and surface area variables (see Table 5), where such elasticity is
represented by the coefficient of the independent variable of this regression (0.8837), the
housing price does not fit perfectly into the variation of surface area, which means that other
factors must have an influence on the price increase³.

Housing Price Elasticity versus Surface Area

As final point, comparing this work with others is complex because of the variety of
functional forms used, the different independent variables included in the models, the types of
dwellings analyzed (new or second-hand, owned or rent, for example), the different attributes of
the geographical space analyzed or the time which has passed since the research was done.

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