Raymond Y. C. Tse

Estimating Neighbourhood Effects in House Prices: Towards a New Hedonic Model Approach

A hedonic equation considers OLS models with independently and identically distributed errors. However, quality of property and location tend to exhibit highly auto-regressive correlation due to spatial dependence and heterogeneity. A modification is made to multiple regression analysis based on the land-rent concept so that the modified hedonic house price function can be determined. This paper develops a stochastic approach which is able to correct autocorrelation bias in the hedonic function. Others tend to model the spatial autocorrelation through the error terms, while this study models it through the constant term. The sample was orientated by location to reflect the neighbourhood effects. Thus the neighbourhood effects can be separated from the random disturbance. Our model, using data from Hong Kong, incorporates adjustments reflecting net floor area ratio, age, floor level, views, transport accessibility and amenities such as availability of recreational facilities. The stochastic model is a more flexible application of hedonic price regressions, making it an appealing alternative to spatial problems.

Measuring residential property values in Hong Kong

The elements of sales comparison for residential property depend on a package of inherent attributes that are valued by consumers. These attributes can be classified into the following categories: structural, physical, neighbourhood and environmental. A model that incorporates adjustments for floor area, age, views and amenities such as availability of recreational facilities is presented and discussed. A multiple regression analysis with transactions‐based data, using weighted least square to determine the discrete estate‐type induced price effect in the Hong Kong housing market, is also presented. The paper demonstrates how the view of negative housing attributes is capitalised into house prices. Specifically, it is shown that the residential property values are higher for estate‐type housing properties, and lower for dwelling units with a cemetery view.

An empirical analysis of the barriers to implementing e‐commerce in small‐medium sized construction contractors in the state of Victoria, Australia

To improve organizational performance and sustain a competitive advantage many Australian businesses have begun to embrace e‐commerce. For example, businesses from the automotive, banking, insurance and retail industries have been able to leverage the benefits of information and communication technologies. Yet, those from the construction industry have been slow, perhaps even reluctant, to implement information and communication technologies to support ecommerce. Thus, this paper aims to determine the barriers that small‐medium sized contractors are experiencing when confronted with the need to implement e‐commerce to sustain their competitiveness. Unstructured interviews were undertaken with managers from 20 small‐medium sized contractors from the State of Victoria in Australia, which had annual turnovers ranging from

Estimating the impact of economic factors on tourism: evidence from Hong Kong.

1‐50 million. The financial, organizational, technical and human barriers that were identified from findings are presented and discussed. The paper concludes by proposing strategies that small‐medium sized contractors may adopt if they to leverage the benefits of e‐commerce.

Impact of Property Prices on Stock Prices in Hong Kong

This study examines issues relating to the impact of economic factors on tourist expenditure and hotel room occupancy rate. The article first presents an overview of the tourism industry in Hong Kong, an examination of the particular aspects of the tourism industry, and an estimate of tourist spending and hotel room occupancy rates. Using an expectations model, real tourism expenditure is found to depend on expected income, expected exchange rate and price level. The results of the article also reveal that the equilibrium hotel occupancy rate is a function of tourist flows, exchange rates, price level and length of stay.

Is it training in construction industry useful

This paper studies the extent to which real estate prices impact common stock prices in Hong Kong. Real estate-related firms account for over 30 percent of Hong Kongs stock market capitalization. The real estate markets are therefore major determinants of changes in common stock prices. This study, using data during the 1974-1998 period, not only supports empirically that both unexpected changes in residential and office property prices are important determinants of the change in stock prices for Hong Kong, it also finds that the property and stock price series are cointegrated. Impulse response function based on an error-correction VAR model is used to examine the dynamic relationships between real estate and common stock prices.

Impact of comprehensive development zoning on real estate development in Hong Kong

Though there is a general belief that the investment in information technology (IT) will improve the productivity of the construction industry, the extent to which the construction industry has used IT for strategic advantage has been limited. This study investigates the differences in the use of IT in three major participants of the construction industry in Hong Kong: engineering firms, architectural firms, and quantity surveying firms. In addition, an in-depth interview was carried out with a leading firm in each of the professions for studying the scope of use of IT in Hong Kongs construction industry. The findings reveal some interesting facts that are useful to managers of the construction industry in making decisions on investment in IT.

Housing Vacancy and Rental Adjustment: Evidence from Hong Kong

This article presents empirical tests to examine if the comprehensive development area (CDA) where the town planning is more comprehensive has relatively higher economic values than the area outside CDA. The three hypothesis are: (i) CDAs have less environmental complaints than areas outside CDA; (ii) property sales price variances in CDAs are smaller than those in areas outside CDAs; and (iii) property sales prices in CDAs are higher than those in areas outside CDAs. These findings have important implications on efforts to consider planning policy in land use decisions.

Income elasticity of housing consumption in Hong Kong: a cointegration approach

The traditional rental adjustment equation is flawed in that the equilibrium paths for the adjustment of rents and vacancy rates cannot hold simultaneously over time. This paper suggests a two-equation model of rental adjustments based on adaptive expectations rather than the single-equation model presented in the traditional literature, and provides empirical tests. Annual data from the housing market in Hong Kong during the 1980-96 period are consistent with the adjustment equation. The results also show that the rate of change of real rents is neutral with respect to inflation.

Office Property Returns in Shanghai, Guangzhou, and Shenzhen

Income elasticity of housing expenditure is of considerable interest particularly to applied researchers in housing economics. However, there is a wide variation in the estimation of income elasticity. Such a variation is attributed to different specifications of estimation. This paper applies techniques developed in the literature of cointegration analysis to re-examine the income elasticity of housing consumption based on a long-run equilibrium model fitted with time-series data. Tests for unit roots are conducted to avoid spurious results in the estimation of the model. The use of the timeseries data generates some attractive properties. The results show that the short-run income elasticity is generally less than unity and the adjustment parameter is about 0.8. These results can be used to estimate the value of income elasticity of public and private housing residents, and of owners and renters separately.