The Hedonic Pricing Model Applied to the Housing Market
Purpose: The article applies the hedonic pricing model to estimate house price in the housing market of Vietnam, which is a country with a fledgeling housing market, so the study is expected to bring interesting findings. Design/Methodology/Approach: By applying the hedonic pricing model, most of the previous studies have reported that house price is significantly influenced by the characteristics of the house itself, its location and surrounding facilities. Based on this, the article adopts the Ordinary Least Squares (OLS) regression in combination with robustness statistics in the model estimation, so the estimated results on house price are reliable and able to be widely applied. Data are collected through the survey into housing projects in Ho Chi Minh and Ha Noi city, which are the two largest cities in Vietnam. Findings: The findings reveal that the hedonic pricing model can be applied to estimate house price in Vietnam’s housing market. This can be said to be a big success in giving first empirical evidence in Vietnam on this matter. Specifically, house price is negatively affected by its proximity to the city center. Also, factors including house size, house type, house structure, number of bedrooms, amenities around the house exert a positive influence on the price. Practical Implications: The estimated results are typical and reliable, which can be applied universally. Originality/Value: The study confirms the hedonic pricing model can be well-applied to accurately estimate the price of houses in Vietnam. More than that, the findings are also essential for other countries, especially those with a nascent housing market like Vietnam.