This research uncovers interesting findings including the relevance of unexpired lease terms, and the impacts of market dynamics such as the physical heterogeneity of properties and hearsay. Using a qualitative approach, data are collected through semi-structured interviews with twenty expert property practitioners including valuers, academics, property developers, mortgage providers and housing agents. Thus, the purpose of this research is to ascertain the micro-level determinants of house prices in Ghana. In many developing countries, house price index construction is sparse, leaving decisions which hinge on housing performance data with little corroboratory evidence. The overarching factors that ultimately determine the choice of an approach are research aim and objectives. However, it is important to note that based on the advantages and disadvantages of each approach, no particular approach is necessarily superior to others. Even though the simple parametric approach seems to be the most widely employed model, the chapter provides useful insights about other possible alternative models that can be applied in housing research. The semi-parametric models combine elements of the parametric and nonparametric models, thereby, reducing the problems inherent in such models. Even though the nonparametric models avoid the strong assumptions of parametric models, their computations are technical and complicated. The discussion shows that parametric models are easy to estimate and interpret but impose some strong assumptions, which can produce misleading results when the assumptions are violated. Parametric models (loglinear OLS, Box-Cox OLS, and weighted least square models), nonparametric and kernel estimates (nearest neighbour and local polynomial estimates models) and semi-parametric models (Robinson-Stock, Yatchew's differencing and Clapp's local regression models) are discussed.
The aim of this chapter is to discuss hedonic pricing models that are often employed in housing research.
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