ESTIMATING HOUSE PRICE GROWTH WITH REPEAT SALES DATA - WHATS THE AIM OF THE GAME

Since the seminal work of M. Bailey, R. Muth, and H. Nourse (1963, J. Amer. Statist. Assoc 58, 933-942), numerous articles have been written about repeat sales and other methods for constructing house price ind ices. Our justification for producing yet another paper on this subjec t is to reemphasize fundamentals. We focus on the basic building block s-asking questions about what the underlying target is, how repeat sal es goes about estimating the target, and when a particular index might be used in practice-rather than on more complex, higher level concern s such as statistical or modeling accuracy. We find that much of the d ebate over index methodology can be distilled to implicit and largely unrecognized disagreement over the desired target or the intended appl ication. Consequently,we contend that paying greater heed to fundament al questions offers significant rewards to both researchers and practi tioners. (C) 1997 Academic Press.