Housing Market in Malaga: An Application of the Hedonic Methodology



Cox transformations have been introduced, although the results obtained have not significantly
improved those obtained with traditional functional forms. On the one hand, Box-Cox
transformations have considerably hindered later estimations of implicit hedonic prices of
independent variables, as pointed out by Goodman (1978), Halvorsen and Pollakowski (1981),
and Cassel and Mendelsohn (1985).

The application of this methodology to the housing market began in the 1960s, with the
work of Ridker and Henning (1967) being the first to deal with attributes shaping the value of
residential properties and making special reference to an environmental factor such as air
pollution in the area. However, Freeman (1979) is considered to be the author who provided the
first theoretical justification for the application of this methodology to the housing market. Based
on the seminal work of Ridker and Henning (1967), the different attributes of a dwelling were
grouped into three categories: the structural attributes of the house, location attributes, and
neighborhood and environmental attributes. Therefore, according to the hedonic model, housing
prices would be explained by the sum of the implicit prices of the dwelling's structural, location,
and neighborhood attributes.

Given that dwellings have been considered multiattributed commodities, in recent
decades they have been analyzed with the hedonic method by a large number of authors. Table
1 shows some of these works, published by both Spanish authors as well as other nationalities,
grouped according to the objective.



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