Advertisement

The System of National Accounts and Alternative Approaches to the Construction of Commercial Property Price Indexes

Chapter
  • 197 Downloads
Part of the Advances in Japanese Business and Economics book series (AJBE, volume 11)

Abstract

How can a commercial property price index (CPPI) be defined and constructed? And what kind of relationship does the measurement of commercial property’s value have to the System of National Accounts and to concerns about national financial sectors? In order to answer such questions, this paper aims to outline the concepts that can be used to define and measure the value of commercial property, and to clarify the relationship of such measurement to the System of National Accounts and to the financial system.

References

  1. Bokhari, S., and D. Geltner. 2012. Estimating real estate price movements for high frequency tradable indexes in a scarce data environment. Journal of Real Estate Finance and Economics 45 (2): 522–543.Google Scholar
  2. Bostic, R.W., S.D. Longhofer, and C.L. Redfearn. 2007. Land leverage: Decomposing home price dynamics. Real Estate Economics 35 (2): 183–2008.CrossRefGoogle Scholar
  3. Burnett-Issacs, K., N. Huang, and W.E. Diewert. 2016. Developing Land and Structure Price Indexes for Ottawa Condominium Apartments. Discussion Paper 16–09, Vancouver School of Economics: University of British Columbia, Vancouver, B.C., Canada.Google Scholar
  4. Clapp, J.M. 1980. The elasticity of substitution for land: The effects of measurement errors. Journal of Urban Economics 8: 255–263.CrossRefGoogle Scholar
  5. Cleveland, W.S. 1979. Robust locally weighted regression and smoothing scatterplots. Journal of the American Statistical Association 74: 829–836.CrossRefGoogle Scholar
  6. Court, A.T. 1939. Hedonic price indexes with automotive examples. In The Dynamics of Automobile Demand, pp. 99–117. New York: General Motors Corporation.Google Scholar
  7. Crosby, N., C. Lizieri, and P. McAllister. 2010. Means, motive and opportunity? disentangling client influence on performance measurement appraisals. Journal of Property Research 27 (2): 181–201.CrossRefGoogle Scholar
  8. de Haan, Jan, and W.E. Diewert (eds.). 2011. Residential Property Price Handbook. Luxembourg: Eurostat.Google Scholar
  9. Diewert, W.E. 1976. Exact and superlative index numbers. Journal of Econometrics 4: 114–145.CrossRefGoogle Scholar
  10. Diewert, W.E. 1992. Fisher ideal output, input and productivity indexes revisited. Journal of Productivity Analysis 3: 211–248.CrossRefGoogle Scholar
  11. Diewert, W.E. 2005. Issues in the measurement of capital services, depreciation, asset price changes and interest rates. In Measuring Capital in the New Economy, ed. C. Corrado, J. Haltiwanger, and D. Sichel, 479–542. Chicago: University of Chicago Press.Google Scholar
  12. Diewert, W.E. 2008. The paris OECD-IMF workshop on real estate price indexes: Conclusions and further directions. In Proceedings from the OECD Workshop on Productivity Measurement and Analysis, 11–36. Paris: OECD.Google Scholar
  13. Diewert, W.E. 2010. Alternative approaches to measuring house price inflation. Discussion Paper 10–10, Department of Economics, The University of British Columbia, Vancouver, Canada, V6T 1Z1.Google Scholar
  14. Diewert, W.E. 2019. Quality adjustment and hedonics: A unified approach. Discussion Paper 19–01, Vancouver School of Economics, University of British Columbia, Vancouver, B.C., Canada, V6T 1L4.Google Scholar
  15. Diewert, W.E., and C. Shimizu. 2015a. A conceptual framework for commercial property price indexes. Journal of Statistical Science and Application 3 (9–10): 131–152.Google Scholar
  16. Diewert, W.E., and C. Shimizu. 2015b. Residential property price indexes for Tokyo. Macroeconomic Dynamics 19: 1659–1714.CrossRefGoogle Scholar
  17. Diewert, W.E., and C. Shimizu. 2016. Hedonic regression models for Tokyo condominium sales. Regional Science and Urban Economics 60: 300–315.CrossRefGoogle Scholar
  18. Diewert, W.E., and C. Shimizu. 2017. Alternative approaches to commercial property price indexes for Tokyo. Review of Income and Wealth 63 (3): 492–519.CrossRefGoogle Scholar
  19. Diewert, W.E., and C. Shimizu. 2019. Alternative land price indexes for commercial properties in Tokyo. Review of Income and Wealth. (Forthcoming).Google Scholar
  20. Diewert, W.E., J. de Haan, and R. Hendriks. 2011. The decomposition of a house price index into land and structures components: A hedonic regression approach. The Valuation Journal 6: 58–106.Google Scholar
  21. Diewert, W.E., J. de Haan, and R. Hendriks. 2015. Hedonic regressions and the decomposition of a house price index into land and structure components. Econometric Reviews 34: 106–126.CrossRefGoogle Scholar
  22. Diewert, W.E., K. Fox, and C. Shimizu. 2016. Commercial property price indexes and the system of national accounts. Journal of Economic Surveys 30 (5): 913–943.CrossRefGoogle Scholar
  23. Diewert, W.E., N. Huang and K. Burnett-Isaacs. 2017. Alternative approaches for resale housing price indexes. Discussion Paper 17–05, Vancouver School of Economics, The University of British Columbia, Vancouver, Canada, V6T 1L4.Google Scholar
  24. Fisher, I. 1922. The Making of Index Numbers. Boston: Houghton-Mifflin.Google Scholar
  25. Francke, M.K. 2008. The hierarchical trend model. In Mass Appraisal Methods: An International Perspective for Property Valuers, ed. T. Kauko, and M. Damato, 164–180. Oxford: Wiley-Blackwell.Google Scholar
  26. Geltner, D. 1997. The use of appraisals in portfolio valuation and index. Journal of Real Estate Finance and Economics 15: 423–445.Google Scholar
  27. Geltner, D., and W. Goetzmann. 2000. Two decades of commercial property returns: A repeated-measures regression-based version of the NCREIF index. Journal of Real Estate Finance and Economics 21: 5–21.Google Scholar
  28. Geltner, D., and S. Bokhari. 2019. Commercial buildings capital consumption and the United States national accounts. Review of Income and Wealth 65 (3): 561–591.Google Scholar
  29. Geltner, D., R.A. Graff, and M.S. Young. 1994. Random disaggregate appraisal error in commercial property, evidence from the russell-NCREIF database. Journal of Real Estate Research 9 (4): 403–419.Google Scholar
  30. Geltner, D., H. Pollakowski, H. Horrigan, and B. Case. 2010. REIT-based pure property return indexes. United States Patent Application Publication, Publication Number: US 2010/0174663 A1, Publication Date: July 8, 2010.Google Scholar
  31. Geltner, D.M., N.G. Miller, J. Clayton, and P. Eichholtz. 2014. Commercial Real Estate Analysis and Investments, 3rd ed. Mason Ohio: On Course Learning.Google Scholar
  32. Henderson, R. 1916. Note on graduation by adjusted average. Actuarial Society of America Transactions 17: 43–48.Google Scholar
  33. Hill, R.J., M. Scholz, C. Shimizu, and M. Steurer. 2018. An evaluation of the methods used by European countries to compute their official house price indices. Economie et Statistique/Economics and Statistics Numbers 500–502: 221–238.Google Scholar
  34. Koev, E., and J.M.C. Santos Silva. 2008. Hedonic Methods for Decomposing House Price Indices Into Land and Structure Components. unpublished paper, Department of Economics: University of Essex, England.Google Scholar
  35. McMillen, D.P. 2003. The return of centralization to Chicago: Using repeat sales to identify changes in house price distance gradients. Regional Science and Urban Economics 33: 287–304.CrossRefGoogle Scholar
  36. Muth, R.F. 1971. The derived demand for urban residential land. Urban Studies 8: 243–254.CrossRefGoogle Scholar
  37. Patrick, G. 2017. Redeveloping Ireland’s residential property price index (RPPI). Germany: In Paper presented at the Ottawa Group Meeting at Eltville.Google Scholar
  38. Rambaldi, A.N., R.R.J. McAllister, K. Collins and C.S. Fletcher. 2010. Separating land from structure in property prices: A case study from Brisbane Australia. In School of Economics, The University of Queensland, St. Lucia, 4072. Queensland, Australia.Google Scholar
  39. Rambaldi, A.N., R.R.J McAllister and C.S. Fletcher. 2016. Decoupling land values in residential property prices: Smoothing methods for hedonic imputed price indices. In Paper presented at the 34th IARIW General Conference. Dresden, Germany.Google Scholar
  40. Rosen, S. 1974. Hedonic prices and implicit markets: Product differentiation in pure competition. Journal of Political Economy 82: 34–55.CrossRefGoogle Scholar
  41. Schreyer, P. 2001. OECD productivity manual: A guide to the measurement of industry-level and aggregate productivity growth. Paris: OECD.Google Scholar
  42. Schreyer, P. 2009. Measuring Capital, Statistics Directorate, National Accounts, STD/NAD(2009) 1. Paris: OECD.Google Scholar
  43. Schwann, G.M. 1998. A real estate price index for thin markets. Journal of Real Estate Finance and Economics 16 (3): 269–287.Google Scholar
  44. Shimizu, C. 2016. Microstructure of asset prices, property income, and discount rates in Tokyo residential market. International Journal of Housing Markets and Analysis 10 (4): 552–571.Google Scholar
  45. Shimizu, C., and K.G. Nishimura. 2006. Biases in appraisal land price information: The case of Japan. Journal of Property Investment & Finance 24 (2): 150–175.CrossRefGoogle Scholar
  46. Shimizu, C., K.G. Nishimura, and T. Watanabe. 2010. Housing prices in Tokyo: A comparison of hedonic and repeat sales measures. Journal of Economics and Statistics 230: 792–813.Google Scholar
  47. Shimizu, C., W.E. Diewert, K.G. Nishimura, and T. Watanabe. 2015. Estimating quality adjusted commercial property price indexes using Japanese REIT data. Journal of Property Research 32 (3): 217–239.CrossRefGoogle Scholar
  48. Silver, M.S. 2018. How to measure hedonic property price indexes better. EURONA 1 (2018): 35–66.Google Scholar
  49. Triplett, J. 2004. Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes, Directorate for Science, Technology and Industry, DSTI/DOC(2004) 9. Paris: OECD.Google Scholar
  50. White, K.J. 2004. Shazam: User’s Reference Manual, Version 10. Vancouver, Canada: Northwest Econometrics Ltd.Google Scholar

Copyright information

© Springer Japan KK, part of Springer Nature 2020

Authors and Affiliations

  1. 1.University of British ColumbiaVancouverCanada
  2. 2.National Graduate Institute for Policy Studies (GRIPS)TokyoJapan
  3. 3.Nihon University & The University of TokyoTokyoJapan
  4. 4.The University of TokyoTokyoJapan

Personalised recommendations