The Market Valuation of Interior Design and Developer Strategies: A Simple Theory and Some Evidence

Charles Ka Yui Leung; Wai Yip Ma; Jun Zhang

doi:10.53383/100180

The Market Valuation of Interior Design and Developer Strategies: A Simple Theory and Some Evidence

Charles Ka Yui Leung^*, Wai Yip Ma, Jun Zhang

^*Corresponding author for this work

Department of Economics and Finance

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

9 Citations (Scopus)

Abstract

How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? By following recent research based on the “graph theory,” this paper confirms the importance of internal design variables in a hedonic pricing model, which is applied to a large dataset of high-rise apartment buildings in Asia. The evidence is consistent with a simple theory in that developers strategically use interior design to “dilute” the effect of location, which leads to a form of endogenous multicollinearity. Directions for future research are also discussed.

Original language	English
Pages (from-to)	63-107
Journal	International Real Estate Review
Volume	17
Issue number	1
DOIs	https://doi.org/10.53383/100180
Publication status	Published - 1 Mar 2014

Bibliographical note

Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].

Research Keywords

Dummy Variables
Endogenous Multicollinearity
Interaction Terms
Interior Design
Market Valuation

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abstract = "How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? By following recent research based on the “graph theory,” this paper confirms the importance of internal design variables in a hedonic pricing model, which is applied to a large dataset of high-rise apartment buildings in Asia. The evidence is consistent with a simple theory in that developers strategically use interior design to “dilute” the effect of location, which leads to a form of endogenous multicollinearity. Directions for future research are also discussed.",

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N2 - How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? By following recent research based on the “graph theory,” this paper confirms the importance of internal design variables in a hedonic pricing model, which is applied to a large dataset of high-rise apartment buildings in Asia. The evidence is consistent with a simple theory in that developers strategically use interior design to “dilute” the effect of location, which leads to a form of endogenous multicollinearity. Directions for future research are also discussed.

AB - How much do the market values of housing reflect its interior design? Does the interior design interact with other housing attributes? By following recent research based on the “graph theory,” this paper confirms the importance of internal design variables in a hedonic pricing model, which is applied to a large dataset of high-rise apartment buildings in Asia. The evidence is consistent with a simple theory in that developers strategically use interior design to “dilute” the effect of location, which leads to a form of endogenous multicollinearity. Directions for future research are also discussed.

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KW - Interaction Terms

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JF - International Real Estate Review

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The Market Valuation of Interior Design and Developer Strategies: A Simple Theory and Some Evidence

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