Why House Price Indexes Differ: Measurement and Analysis

Title Why House Price Indexes Differ: Measurement and Analysis
Author Name Mick Silver
Link http://hofinet.org/documents/doc.aspx?id=1224

Why house Price Indexes Differ: Measurement and Analysis by Mick Silver
IMF Working Paper/12/125
May 2012

The paper is motivated by the wide variation in the form HPIs can take both with respect to coverage and method. HPIs have been identified as a key data gap by G-20 with current initiatives to ameliorate such differences being undertaken by the Bank of International Settlements, Financial Stability Board, IMF, Eurostat, the European Central Bank, and the (United Nations) Inter-Secretariat Working Group on Price Statistics. Links to the BIS data base, the Eurostat Handbook on Property Price Indexes and related studies are available on the HOFINET page on Real Estate Price Indicators


Using three country case studies, Silver (2011) identified substantial differences in measured national house price inflation between different indexes within a country. This paper provides an extensive and formal analysis of this measurement problem involving panel data from 24 countries and 153 HPIs over the period 2005Q1 to 2010Q1. The results clearly demonstrate that measurement matters; substantively so and particularly when it really matters, during a recession. Different patterns over time were distinguished for the effects (coefficients) on house price inflation of different measurement variables. The paper provides links to the Bank of International Settlements (BIS) data base of property price indexes at http://www.bis.org/statistics/pp.htm

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