A Note on Hedonic Price Estimation of Urban Residential Services: A Case Study of Rawalpindi City

Jahan Zeb Manan


A prerequisite for planning in the housing sector, be it urban
renewal in slum areas or public provision of housing for the urban poor,
is the availability of some indices of consumer preferences regarding
the various housing services consumed by them. Such information
facilitates decision-making as regards the size, and quality of
dwellings which 'best' meet the needs of the urban poor. This study
estimates the market prices (marginal valuations) of the various housing
services consumed by urban households in Rawalpindi City. This is done
by regressing rent/imputed rent of the residential units on the
different characteristics embodied in the various units. The analysis
indicates that the quantitative variable (number of rooms) explains a
significant proportion of the variance in the dependent variable
(rent/imputed rent). The qualitative variables (electricity, drinking
water, garbage disposal and sanitary facilities, type of structure of
house); when included in the model contribute significantly to the
explained variance in the dependent variable. The analysis reveals (and
'quanti¬ties') consumer preference for housing services.

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DOI: https://doi.org/10.30541/v17i4pp.479-494


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