Article: The Market Valuation of Interior Design and Developer Strategies: A Simple Theory and Some Evidence Author: Charles Ka Yui LEUNG, Wai Yip MA, Jun ZHANG Start Page: 63 Abstract: How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? By following recent research based on the “graph theory,” this paper confirms the importance of internal design variables in a hedonic pricing model, which is applied to a large dataset of high-rise apartment buildings in Asia. The evidence is consistent with a simple theory in that developers strategically use interior design to “dilute” the effect of location, which leads to a form of endogenous multicollinearity. Directions for future research are also discussed. Keywords Endogenous Multicollinearity; Interior Design; Market Valuation; Dummy Variables; Interaction Terms All articles listed here are available for download in portable document format (PDF). |