Estimation of Housing Price Function Using Hierarchy Linear Model

Hedonic price model is now widely used in its determination of housing price analysis and a lot o researches was conducted in this field. However hedonic price model has a fundamental problems in estimating housing price function like the fixed effect of coefficients, spatial autocorrelation and heterogeniety. So, in this study hierarchy linear model was used in estimating housing price function and the concept of that model was introduced in detail. Housing price model was constructed in order to compare the results of two models. The estimated coefficients of two model was represented somewhat different from its size and statistical significance. According to the comparison of two model, hierarchy linear model was better performance than hedoinc model in terms of its predictive power.

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