The attractiveness of the location is again determined according to criteria such as school and shopping facilities, noise pollution and accessibility by public transport, etc. late 1960s, the hedonic method has proven to be an effective tool for estimating the effects of changes in environmental quality on housing prices and has. Jones, Peryam & Thurstone (1955) 2 showed that longer scales, up to nine intervals, tended to be more discriminating than shorter scales, and there was some indication that a scale with eleven intervals would be even more effective 3. The hedonic method is derived from the microeconomic theory of implicit prices, which supposes that utility is derived from the characteristics or attributes of goods (Lancaster, 1966). The hedonic scale was the result of extensive research conducted at the Quartermaster and the University of Chicago. In the case of a property, the quality traits are the net living area, the building volume, the year of construction, the condition of the building, the standard of finish and the location in the municipality or neighborhood, including the attractiveness of the relevant area. 2.2.2 The Hedonic Method The hedonic method is based on hedonic price theory, which is useful for the analysis of differentiated good pricing (Griliches, 1961). An item is always mentally broken down into its various quality traits, and the model assumes that each trait has a benefit that can be expressed as a price. Nowadays, the hedonic approach is used not only to value real estate, but also to calculate inflation and economic growth in many countries.

The data is currently based on more than 20,000 arm’s length transactions per year, estimated to represent half of all real estate sales in Switzerland. possibly expect the hedonic method will produce, and secondly on some aspects concerning the practice of price statistics. The model was developed in 1999 by the real estate service provider Wüest und Partner in association with UBS. These include single-family and two-family houses, vacation homes as well as apartments in condominium ownership and vacation apartments. Hedonic estimation is based on a comparison of the property you want to buy or sell with current sales of owner-occupied residential properties on the Swiss market.

Hedonic method