An appraisal-based generalized regression estimator of house price change

The house price index compiled by Statistics Netherlands relies on the Sale Price Appraisal Ratio (SPAR) method. The SPAR method combines selling prices with prior government assessments of properties. This paper outlines an alternative approach where the appraisals serve as auxiliary information in a generalized regression (GREG) framework. An application on Dutch data demonstrates that, although the GREG index is much smoother than the ratio of sample means, it is very similar to the SPAR series. To explain this result we show that the SPAR index is an estimator of our more general GREG index and in practice almost as efficient