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Paper eres2011_254:
Exploring the Case for Expert-defined Housing Submarket Boundaries

id eres2011_254
authors Keskin, Berna; Watkins, Craig
year 2011
title Exploring the Case for Expert-defined Housing Submarket Boundaries
source 18th Annual European Real Estate Society Conference in Eindhoven, the Netherlands
summary Although there are numerous good reasons for real estate analysts to construct housing submarkets, there is little clarity about how this might best be done in practice. The existing literature offers a variety of techniques based on principal components analysis, cluster analysis and other statistical procedures. This paper asks whether, given their market expertise and their role in disseminating information and shaping search patterns and bid formation, real estate agents might over a less data intensive method of submarket construction. The empirical research is based on an experiment that compares the performance of submarket boundaries constructed in consultation with agents with those identified using standard statistical methods for partitioning housing data. The analysis uses data on 2,175 transactions that took place in Istanbul, Turkey between November 2006 and March 2007. The results do not imply the absolute superiority of any single method but they do suggest that expert-defined boundaries tend to perform at least as well as alternative construction techniques. Importantly this suggests that this cost-effective method might help remove one constraint that has limited the adoption of submarkets by real estate analysts and planners in emerging markets context where rich datasets are not readily available.
keywords housing markets, submarkets, information flows, real estate agents
series ERES:conference
content file.ppt (1,142,272 bytes)
discussion No discussions. Post discussion ...
session E5: Housing Market (II)
last changed 2011/06/23 16:27
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