Dr. Steven Bourassa publishes internationally

Dr. Steven Bourassa and colleagues have published a number of articles in the field of international real estate research.

Estimation and updating methods for hedonic valuation” (with Michael Mayer, Martin Hoesli, and Donato Scognamiglio), Journal of European Real Estate Research, vol. 12, no. 1 (2019), pp. 134-150.

Abstract: This paper uses a large and rich data set consisting of over 123,000 single-family houses sold in Switzerland between 2005 and 2017 to investigate the accuracy and volatility of different methods for estimating and updating hedonic valuation models. We apply six estimation methods (linear least squares, robust regression, mixed effects regression, random forests, gradient boosting, and neural networks) and two updating methods (moving and extending windows). The gradient boosting method yields the greatest accuracy while the robust method provides the least volatile predictions. There is a clear trade-off across methods depending on whether the goal is to improve accuracy or avoid volatility. The choice between moving and extending windows has only a modest effect on the results. The results should prove useful in improving hedonic models used by property tax assessors, mortgage underwriters, valuation firms, and regulatory authorities.

 

Measuring house price bubbles” (with Martin Hoesli and Elias Oikarinen), Real Estate Economics, vol. 47, no. 2 (2019), pp. 534-563.

Abstract: Using data for six metropolitan housing markets in three countries, this paper provides a comparison of methods used to measure house price bubbles.  We use an asset pricing approach to identify bubble periods retrospectively and then compare those results with results produced by six other methods.  We also apply the various methods recursively to assess their ability to identify bubbles as they form.  In view of the complexity of the asset pricing approach, we conclude that a simple price-rent ratio measure is a reliable method both ex post and in real time.  Our results have important policy implications because a reliable signal that a bubble is forming could be used to avoid further house price increases.

 

Folk custom and home improvement decisions” (with Wen-Chieh Wu and Yu-Chun Ma), International Real Estate Review, vol. 21, no. 3 (2018), pp. 317-341.

We test whether Chinese folk customs and taboos have impacts on the home improvement decisions of Taiwanese homeowners. Based on traditional Chinese culture, we choose dragon and widow’s years as indicators of auspicious (fortune) and inauspicious (taboo) times, respectively. Using a Heckman two-stage estimation approach, our empirical results provide evidence that traditional Chinese folk customs and taboos indeed play roles in decisions on home improvement. We find that the likelihood of a homeowner making home improvements falls significantly at the so-called taboo time. Moreover, we find that expenditure on home improvements rises at the so-called fortune time, particularly in areas outside the capital city region. In addition to considering the impacts of folk customs on home improvement decisions, this paper contributes to the literature by establishing a theoretical model that reflects the fact that homeowners play dual roles as both consumers and suppliers of housing.

SURP Director Publishes Article in the Journal of Urban Economics

Steve Bourassa, Director of the School of Urban and Regional Planning, co-authored an article titled “U.S. Metropolitan House Price Dynamics” in the May 2018 issue of the Journal of Urban Economics. The paper uses advanced statistical techniques to explain changes in house prices in metropolitan areas in the United States. He and his co-authors find that aggregate personal income for metropolitan areas is an important determinant of house price dynamics, but the effect of aggregate income is closely related to constraints on the supply of housing. Supply constraints can be topographical or regulatory. His co-authors are Martin Hoesli (University of Geneva, Switzerland) and Elias Oikarinen and Janne Engblom (both at the University of Turku, Finland).

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Director of SURP/PA & Coauthors Win “Best Paper” (again)

American Real Estate Society
Steven Bourassa, Director of the School of Urban and Regional Planning and the School of Public Administration, and his coauthors Martin Hoesli of the University of Geneva (Switzerland) and Elias Oikarinen and Janne Engblom of the University of Turku (Finland) have won the prize for the best paper in real estate market analysis presented at the American Real Estate Society (ARES) Annual Meeting held in San Diego in April 2017. The paper is titled “Revisiting the House Price-Income Relationship” and aims to resolve some longstanding issues about how personal income growth affects housing markets in metropolitan areas. The paper applies state-of-the-art statistical techniques to analysis of data for the 50 largest metropolitan areas in the U.S. For a second consecutive year, Bourassa and Hoesli have won a “Best Paper” prize at the ARES conference.

Bourassa and Hoesli Win Best Paper Prize

SURP Director Steven Bourassa and co-author Martin Hoesli of the University of Geneva have won the “Innovative Thinking Out of the Box” best paper prize for their paper, “High Frequency House Price Indexes with Scarce Data”, presented at the 2016 American Real Estate Society (ARES) Annual Meeting in Denver, Colorado. The paper presents a method for calculating house price indexes for small areas, such as city neighborhoods, on a monthly or quarterly basis. The paper is forthcoming in the Journal of Real Estate Literature, which is published by ARES. The prize is sponsored by the Homer Hoyt Institute.