A hedonic regression analysis of house asking-prices in Aruba

Leo de Haan¹·² and Stephanie Werleman¹

 

¹ Centrale Bank van Aruba
² De Nederlandsche Bank


Working Paper, this version: 3 February 2020

 

Over the past seven years, the asking prices for houses in Aruba have increased moderately, on average by 2 percent per year. This price buildup was in tandem with an improvement in the quality of the housing stock, i.e., a rise in the number of bedrooms and bathrooms per house and the introduction of amenities such as a garage. We examine the determinants of prices for houses in Aruba, using quarterly data from real estate agencies’ websites over the period 2012Q3 to 2019Q2. Using a hedonic price analysis, we identify the impact of housing characteristics on prices for houses, controlling for fixed effects of regional location, real estate agency, and time. Results indicate that housing characteristics such as number of rooms, construction size, and the presence of specific amenities are significant price determinants.

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