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Hedonic Pricing Model Results Summary

The hedonic pricing model estimates residential property values based on characteristics, policy exposure, and infrastructure access, showing significant effects from proximity to IHDP and PPP sites. Properties near IHDP and PPP increase in value by ETB 14,500 and ETB 17,500 per m² respectively, while access to paved roads and water also positively impacts values. The model explains 72% of price variation, indicating strong explanatory power, with inflation being statistically insignificant.

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tesfu hailu
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2 views2 pages

Hedonic Pricing Model Results Summary

The hedonic pricing model estimates residential property values based on characteristics, policy exposure, and infrastructure access, showing significant effects from proximity to IHDP and PPP sites. Properties near IHDP and PPP increase in value by ETB 14,500 and ETB 17,500 per m² respectively, while access to paved roads and water also positively impacts values. The model explains 72% of price variation, indicating strong explanatory power, with inflation being statistically insignificant.

Uploaded by

tesfu hailu
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Hedonic Pricing Regression Results

The hedonic pricing model used in this study estimates the value of residential properties as
a function of their characteristics, policy exposure, and infrastructure access. The general
form of the regression model is given by:

P = β₀ + β₁(IHDP_Dist<500m) + β₂(PPP_Dist<500m) +
β₃(Road_Access) + β₄(Water_Access) + β₅(Year) + β₆(Inflation) + ε

The table below summarizes the regression coefficients, their significance, and
interpretation.

Variable Coefficient (β) Standard Error P-Value Interpretation

Constant 8000 500 0.000 Base price per


m² (all else
constant)

Distance to 14500 1200 0.000 Adds ETB


IHDP (<500m) 14,500/m² near
IHDP sites

Distance to PPP 17500 1500 0.000 Adds ETB


(<500m) 17,500/m² near
PPP sites

Road Access 9200 1000 0.000 Adds ETB


(paved) 9,200/m²

Water/Sewer 5000 1100 0.002 Adds ETB


Access 5,000/m²

Year (2015 = 2100 400 0.000 Prices increase


base) ETB 2,100/year
on average

Inflation (CPI -300 700 0.321 Not statistically


Index) significant

Model Summary:
• R² = 0.72 (72% of price variation explained)
• F-statistic = 42.3 (p < 0.01)
• Sample Size = 600 observations
This table shows my regression results. We see that proximity to IHDP and PPP housing
projects has a strong, statistically significant effect on real estate values.

For example, properties within 500 meters of IHDP increased by about ETB 14,500 per m²,
and PPP zones by ETB 17,500 per m². These effects are above and beyond general market
trends and inflation.

Access to paved roads and infrastructure like water also had a strong positive effect.

Inflation, interestingly, was not statistically significant in this model — meaning policy and
infrastructure had stronger localized effects than inflation on property values.

The model explains about 72% of the variation in prices, which shows strong explanatory
power.”

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