| dc.description.abstract | Lancaster's theory of consumer behavior states that it is not the good itself that creates utility but its individual characteristics. This theory can also be applied to the housing market. A dwelling is composed of many different attributes, and each of these attributes can affect its value. The purpose of this paper is to determine how important each of these attributes is and what impact it has on housing prices in Oslo. The hedonic pricing model was used to measure the impact of these factors. The housing characteristics are divided into structural, external and locational attributes.
To accomplish this, we use a large micro-level dataset with 80916 samples of sold dwellings in Oslo. This dataset was collected and provided by Eiendomsverdi. The results show that structural characteristics have the largest impact on price, followed by locational factors and finally external factors. We can also observe that prices for attached houses are higher than those for semi-detached houses, detached houses and apartments. In addition, houses with more bedrooms or those with balconies are priced higher than those without. In terms of location, the most expensive district in Oslo is Frogner. We can see that there is a pattern between location and price. Homes located on the western edge of Oslo are generally more expensive than those on the eastern side. | |