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Estimating granular house price distributions in the Australian market using Gaussian mixtures

Willem P Sijp, Anastasios Panagiotelis

arXiv 8 Apr 2024 · Econometrics

arXiv:2404.05178 · PDF · DOI · OpenAlex · Extracted main text

Abstract

A new methodology is proposed to approximate the time-dependent house price distribution at a fine regional scale using Gaussian mixtures. The means, variances and weights of the mixture components are related to time, location and dwelling type through a non linear function trained by a deep functional approximator. Price indices are derived as means, medians, quantiles or other functions of the estimated distributions. Price densities for larger regions, such as a city, are calculated via a weighted sum of the component density functions. The method is applied to a data set covering all of Australia at a fine spatial and temporal resolution. In addition to enabling a detailed exploration of the data, the proposed index yields lower prediction errors in the practical task of individual dwelling price projection from previous sales values within the three major Australian cities. The estimated quantiles are also found to be well calibrated empirically, capturing the complexity of house price distributions.

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33
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
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3Ren, Y., Fox, E.B., Bruce, A (2017) Clustering correlated, sparse data streams to estimate a localized housing price index0.73732100%
4Belasco, E., Farmer, M.C., Lipscomb, C.A (2012) Using a Finite Mixture Model of Heterogeneous Households to Delineate Housing Submarkets0.64441100%
5Bogin, A., Doerner, W., Larson, W (2019) Local house price dynamics: New indices and stylized facts0.64441100%
6Bishop, C.M (2006) Pattern Recognition and Machine Learning0.64422100%
7Francke, M.K., Van de Minne, A.M (2017) The hierarchical repeat sales model for granular commercial real estate and residential price indices0.64422100%
8McMillen, D (2012) Repeat sales as a matching estimator0.64422100%
9Deng, Y., McMillen, D.P., Sing, Foo, T (2012) Private residential price indices in Singapore: A matching approach0.51121100%
10Nicodemo, C., Raya, J.M (2012) Change in the distribution of house prices across spanish cities0.51121100%

Showing the top 10 of 33 scored citations.