The measurement of house prices: A review of the sale price appraisal ratio method

Article type: Research Article

Authors: de Haan, Jan^a | van der Wal, Erna^a | de Vries, Paul^{b; *}

Affiliations: [a] Statistics Netherlands, Division of Macro-economic Statistics and Dissemination, P.O. Box 24500, 2490 HA Den Haag, The Netherlands | [b] Delft University of Technology, OTB Research Institute for the Built Environment, P.O. Box 5030, 2600 GA Delft, The Netherlands

Correspondence: [*] Corresponding author. Tel.: +31 15 278 8115; Fax: +31 15 278 4422; E-mail: [email protected]

Abstract: The sale price appraisal ratio (SPAR) method has been applied in a number of countries to construct house price indexes. This paper reviews the statistical and index number properties of the SPAR approach. Three types of SPAR indexes are distinguished: a weighted index, which aims at tracking the price change of the stock of owner-occupied houses, and two unweighted indexes, an arithmetic one and a geometric one. We also discuss stratified versions of these indexes and show how stratification can be used to estimate an expenditure-based Laspeyres-type price index. Empirical results for the Netherlands are given and compared with the repeat-sales index published by the Dutch land registry until January 2008.

Keywords: House price index, SPAR method, appraisal value, house price

DOI: 10.3233/JEM-2009-0317

Journal: Journal of Economic and Social Measurement, vol. 34, no. 2-3, pp. 51-86, 2009