The 5th International Conference on Modern Management based on Big Data (MMBD2024)

Abstract: Hedonic modeling can be used to examine the impacts of housing characteristics on selling prices. This paper estimates a hedonic price function for single-family houses in Savannah, GA, for the period 2007–2016. Digressing from conventional approaches of modeling a reduced-form hedonic price function, we estimate a structural function whereby the house sale price is directly affected by the usual house attributes and marketing time. Both the home sale price and time on the market, however, are endogenously determined. To account for endogeneity, we estimate the structural hedonic function using a control function approach. The control-function estimator utilizes conditional heteroskedasticity of structural errors in the triangular model. Using this approach, we identify the relationship between the house price and its time on the market solely based on nonlinearities in the control function without looking for excludable instrumental variables for the latter endogenous variable. Our findings suggest that housing prices increase with marketing time.
Keywords: Control function, endogeneity, hedonic pricing, marketing time

Biography: Omid M. Ardakani, Associate Professor of Economics, is the Shirley and Philip Solomons, Sr. Research Fellow in the Department of Economics, Parker College of Business at Georgia Southern University. He received his Ph.D. in economics from the University of Wisconsin-Milwaukee in 2015. Ardakani’s research has been published in leading journals, such as Journal of Economic Dynamics and Control, International Statistical Review, and Studies in Nonlinear Dynamics and Econometrics. Currently, he is the coeditor of Open Economics. His professional activities include serving as the editorial board member of International Finance and Banking and the founding director of Georgia Southern’s Statistics and Econometrics Research Group (SERG).