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Working Paper

The Hedonic House Price Model in a Development Context – Evidence from the National Capital Region of the Philippines, 2000 - 2010

Authors:

Christopher Dann ,

Jakub Grohmann,

Amy Ho,

Sherman Khoo,

Anna Kim,

Swapnil Lal

Abstract

The paper analyses the housing market of the National Capital Region (NCR) of the Philippines, alongside contiguous provinces, using the hedonic house price model. Although we do not have precise house price data, we use rental values as a proxy for housing values, and look at a plethora of internal and external characteristics of houses, from the types of toilet facilities households use, to air quality data, as measured by nitrogen dioxide levels from satellites. Using the Philippine Statistical Authority’s (PSA) ‘Census for Population and Housing’, we manually constructed a panel dataset for the years 2000 and 2010, and then use a range of spatial autoregressive models to empirically test the data, whilst simultaneously accounting for spatial autocorrelation. We then use panel data specifications, such as spatial autoregressive random effects regressions, of which we continue to obtain some robust and statistically significant results. Overall, we confirm that fuel for lighting, toilet facilities, and population density are significant determinants of monthly rental values in and around the cities of the NCR. Nonetheless, due to innumerable endogeneity issues, in addition to the Modifiable Areal Unit Problem (MAUP), we treat our findings as being purely suggestive, in hopes to introduce a future literature on housing inequality in the Philippines.

How to Cite: Dann, C., Grohmann, J., Ho, A., Khoo, S., Kim, A. and Lal, S., 2020. The Hedonic House Price Model in a Development Context – Evidence from the National Capital Region of the Philippines, 2000 - 2010. Rationale, 1, pp.23–58.
Published on 03 Apr 2020.

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