The Application Of Hedonic Price Model In Shanghai Housing Market

With the development of China's economy and urbanization, especially the housing reform in 1990s, the real estate market experienced a rapid growth period, which led to the development of related industries, and created a lot of job opportunities. Real estate has become a pillar industry of the national economy. The real estate market is closely related to people's vital interests, and the rapid growth of housing prices has become a hot topic that aroused people's concern. In order to promote real estate market's healthy development, a series of measures were taken by the government in recent years. However, these measures' effect cannot satisfy our expectation. How to value and assess the housing price in reasonable way, and distinguish the reasonable growth of the housing price from the foam part, and how to explain factors'influence to housing price such as construction itself, location and neighborhood environment are becoming a research target in city economics and real estate economics that arousing more and more scholars'concern.Hedonic Price Model is originated in 1930s in America. After decades of development, the model is widely applied to the fields of the city house pricing, which has become the mainstream method of international pricing and evaluating hedonic price and the residential price index. During the past 10 years, many domestic scholars used hedonic price model in the study of the domestic residential market, but this model in China is far from being widely applied. Under this contest the research in this paper is made. Firstly, the paper summarized the hedonic model's development courses and model theory in detail, and then made quantified research by the sample data collection of residence in Shanghai, including 11 variables and 3 kinds. After that, I set up the Shanghai housing hedonic price model. The model including not only a multiple linear basic hedonic price model, but also use semi logarithm function form and the logarithm function to promote the basic linear model, so that the model has better explanatory power to the housing price changes. In the end of the model, the hedonic variable's multicollinearity was tested by using factor analysis method, so as to establish the linear hedonic price model. The research also compared the influences of the construction area, traffic, living conditions, the residential quality and natural environmental factors on housing prices in Shanghai.Finally, by comparing the four hedonic price model results, and researching the causes of the differences, I summarized the research process and conclusions of this paper in the last part. I hope this study can promote the application of the hedonic price model in the domestic residential market, and help the society to understand the housing price change in reasonable ways, so as to promote the residential real estate market's healthy development.