Articles:
Architectural Design and the Value
of Housing in Riga, Latvia
Authors:
Steven Plaut and Egita Uzulena
Start Page:
112
End Page: 131
Volume: 9
Issue Number: 1
Year: 2006
Publication: International Real Estate Review
Abstract: Architectural
design has generally not been included in estimations of hedonic pricing
models and the reason is no doubt the difficulty in capturing it in a usable
measurement variable. It is usually too idiosyncratic and heterogeneous to
?sum up? easily and introduce as an explanatory variable. However, in some
housing markets, architectural design consists of a limited number of
standardized ?prototypes?, which can then be used as explanatory variables
in hedonic estimations. Such is the case for Riga, Latvia, where almost the
entire housing stock fits into about a score of fairly standardized
architectural design types. This paper is an empirical analysis of the Riga
housing market, which only became a ?market? in a meaningful sense after the
collapse of the Soviet regime in Latvia. The paper analyzes a set of about
3500 transactions, all from recent years. We estimate the elasticity of
housing value with respect to size of housing units and some other physical
features, and the value of the different architectural designs, controlling
for location. This is one of the first hedonic or microeconomic analyses of
housing values in any post-Soviet transitional economy.
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