Housing Market in Malaga: An Application of the Hedonic Methodology

TABLE 1

Some contributions to the application of hedonic methodology to the housing market

1. Obtaining the hedonic price of dwellings.
1.1.	Structural Characteristics	Bartik (1987), Brueckner and Colwell (1983), Can (1992), Clapp and Giaccotto (1998), Fletcher et al. (2000), King (1976), Linneman (1980), Mok et al. (1995), Straszheim (1975)
1.2.	Location Attributes	Adair et al. (1996), Adair et al. (2000), Benson et al. (1998), Brown (1985), Lipscomb (2003), McMillen (2004), Palmquist (1992), Quigley (1979), So et al. (1996), Wheaton (1979)
1.3.	Neighborhood Attributes	Bengochea M. (2003), Cervero and Duncan (2004), Chattopadhyay (1999), Cheshire and Sheppard (1998), Freeman (1979), Goodman and Thibodeau (2003), Harding et al. (2003), Hidano (2002), Kain and Quigley (1975), Li and Brown (1980), Ogwang and Wang (2003), Schafer (1979), Tajima (2003)_____________________________________________
2. Obtaining price indexes		Butler (1982), Englund et al (1998), Goodman (1978), Haurin et al (1991), Meese and Wallace (2003), Mills and Simenauer (1996), Palmquist (1980), Straszheim (1975), Wallace (1996)

Despite the theoretical problems derived from the estimation of the model’s parameters,
these contributions have shown the usefulness of hedonic methodology to identify the factors
determining house prices and their quantification.

Data and empirical model

The objective of this study is to analyze the purchase of dwellings (and therefore, it
excludes tenancies) without legal restrictions to their sale. For the purpose of this research, this
market is considered to be single and homogeneous, and therefore it is implicitly assumed that
all the commodities analyzed are effectively interchangeable. In this way, and as indicated
earlier, hedonic regression is estimated by assuming that the attributes and prices of the
dwellings under analysis are as homogeneous as possible to reduce biases in the estimation of
hedonic prices of house attributes.

The housing market chosen was Malaga city. For this analysis, the city was divided into
the ten districts established by the local planning authorities. It is of note that the Census of
Population and Housing for 2001 recorded a total of 217,079 dwelling units in Malaga city on
the 31st of December 2001, thus comprising the houses that potentially would make up the

statistical population of our work.

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