Hedonic Price Index Number for New One-Family Detached Houses in Finland

Statistics Finland has a relatively long experience in constructing indices of prices of old dwellings and old one-family detached houses using the hedonic approach where regression analysis and classification of flats are combined. Also, for new one-family detached houses a bilateral price-links for houses comparable in quality cannot used because separate house exists only once in data. In outline, we use similar methods as in new blocks of flats and terraced houses and all statistical methods, price aggregation and index number methods follow study of Vartia, Suoperä and Vuorio (2019). We show that quality adjustment is necessary and quality differences should be removed form index series based on different elementary aggregates of prices. In this study, we use some basic and excellent index number formulas. We show that differences between them is not so severe as in the case of new blocks of flats and terraced houses.Our test data is collected from register maintained by tax authorities. The data includes statistical unit specific information on prices, quantities, values and some unit specific quality characteristics form 2015/I to 2019/II being quarter data. The quarter data includes about 300 – 600 observation per a quarter