Pricing inter‐neighbourhood variation: A case study on the rental apartment market in Greater Cairo
Abstract
Purpose
The purpose of this paper is to focus on inter‐neighbourhood variation in the rental apartment market in Greater Cairo, Egypt, and its potential influence on property prices and performance of hedonic pricing models.
Design/methodology/approach
The paper delves into the issue of whether comparables from different neighbourhoods are homogeneous enough to be aggregated in hedonic pricing models. This paper extends the research on rental‐property market segmentation by investigating the existence of apartment submarkets determined by neighbourhoods.
Findings
Results show that parameters are unstable across neighbourhoods and Chow test provides further support for utilising spatial hedonic pricing models.
Originality/value
This paper provides further support for spatial hedonic pricing models using empirical evidence from Greater Cairo, Egypt. The paper finds that explanatory and predictive powers of hedonic pricing models are improved when separate hedonic equations are estimated for each neighbourhood in Greater Cairo. The paper does not provide an elaborate solution for implementing spatial models in Greater Cairo but rather supports the notion that one has to be developed.
Keywords
Citation
Roubi, S. and Ghazaly, A. (2007), "Pricing inter‐neighbourhood variation: A case study on the rental apartment market in Greater Cairo", Property Management, Vol. 25 No. 1, pp. 68-79. https://doi.org/10.1108/02637470710723263
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited