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Estimation of Hedonic Models Using a Multilevel Approach: An Application for the Swiss Rental Market

Summary

This paper is an empirical application of a hedonic model to determine rents in Switzerland. Unlike traditional hedonic models, we take account of the fact that data are clustered at different levels. The resulting spatial autocorrelation and heterogeneity permits a consideration of different submarkets within Switzerland. For the empirical analysis, we consider the special case of the clustering of apartments at municipality level. Our results show that even after controlling for housing and locational attributes, a significant part of rental differences are still attributable to municipality differences.

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Correspondence to Dragana Djurdjevic.

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Acknowledgement: We are grateful to the participants of the Swiss hedonic day, 27 June 2007, Geneva. We also thank Philippe Thalmann and Andrea Baranzini for their helpful comments. All remaining errors are ours.

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Open Access This article is distributed under the terms of the Creative Commons Attribution 2.0 International License ( https://creativecommons.org/licenses/by/2.0 ), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Djurdjevic, D., Eugster, C. & Haase, R. Estimation of Hedonic Models Using a Multilevel Approach: An Application for the Swiss Rental Market. Swiss J Economics Statistics 144, 679–701 (2008). https://doi.org/10.1007/BF03399271

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  • DOI: https://doi.org/10.1007/BF03399271

JEL-Classification

  • C14
  • J16
  • R31

Keywords

  • hedonic model
  • rental market
  • multilevel modelling