Expert: V. Mollica, M. Hardman
We provided an opinion on the newly developed Hedonic Valuation Indices (HVI) and its methodology. The hedonic regression is a method used to calculate the CoreLogic Daily Home Value Index which seeks to overcome the issue of compositional bias associated with median price and repeat sales measures. The premise for this lies in hedonic theory which says that the value of a composite good, such as a house, is the sum of its components. Thus, by separating the sample of houses into their various structural and locational attributes, the differences in these qualitative factors across houses can be controlled. Hedonic imputation is a method of imputing the value of dwellings having a certain set of characteristics (but no current sales price) by observing the sales prices and characteristics of other dwellings that do have recent sales prices.
Description: Review of Hedonic Valuation Indices