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Abstract
It is widely recognized that location is the primary determining factor of housing price. But to what extent the variation of housing price in Shanghai can be explained by the locational factor has not been empirically examined. In this paper, we examine the power of applying the hedonic method to the spatial-statistical analysis of housing prices in Shanghai. The data we use covers all new commercial residential housings sold in Shanghai during July 2004 and June 2006. The main focus in this paper is to examine the effect of geographical distance to city centre on the selling price of residential housings in Shanghai. We also discuss how the price gradient varies at different directions in Shanghai. Finally, we demonstrate the importance of applying quality control on the development of a housing price index. The statistical methodology and empirical results obtained in this paper carry interesting implications for other cities in China as well.
Acknowledgment
The authors thank the NSFC (National Science Foundation of China) (No. 70601007), Key Research Institute Fund of Humanities and Social Science in China (No. 05JJD790003) and Shanghai Pujiang Project for financial support on the research work of this paper. The very helpful comments from the Editor, Professor Shujie Yao, the participants of the housing economics workshop of ENHR annual conference in Rotterdam on June 2007 and the seminar at the IBF of Uppsala University on August 2007 are greatly appreciated. Any remaining errors are our own.
Notes
Notes
1. Note: all the data regarding Shanghai information in this paper are obtained from Shanghai Statistics Yearbook (Citation1996–2006) and Shanghai Real Estate Yearbook (1997–2005) unless otherwise noted.
2. Thanks to Professor Shujie Yao for bringing our attention to this issue.