Are new homes special?

Houses are idiosyncratic goods; no two houses are completely identical because the set of characteristics that are embodied in any particular unit are unique to that unit. The hedonic model of individual house prices maps the characteristics of houses to their transaction prices through a regression of sales price (or more often, its logarithm) on the vector of observable housing characteristics. In this way the implicit prices of those embodied characteristics can be estimated as the derivative of price on that characteristic (Rosen, 1974). One of those characteristics is the age of the......(read more)

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