Defining and Measuring Housing Location in Appraisal and Hedonic Price Models: A Systematic Review
DOI:
https://doi.org/10.12928/jampe.v5i2.12673Keywords:
Accessibility, Hedonic Price Model, Location measurement, Real Estate Appraisal, Systematic reviewAbstract
Location is a complex, multidimensional aspect often highly preferential
and dependent on personal preference. In general discussions, this may
not pose a significant problem. However, in quantitative analyses such
as housing appraisals (sales comparison approach) or applied research
using the hedonic price model, the nature and characteristics of location
can become a major issue. Even though location is often included in
housing studies, there is no clear and straightforward way to measure it
as a single variable. This challenge is exacerbated in Indonesia due to the
lack of a valid and reliable property database. Therefore, this study
conducts a systematic review that contributes to the understanding of
how location can be measured objectively. The present study aims to
propose an alternative method for defining and measuring the strategic
location of housing in appraisal practice, particularly through the sales
comparison approach. Based on the review, location is measured using
two aspects: spatial aspects and circumstantial aspects. Generally,
spatial aspects are much more dominant than circumstantial aspects.
The identified location dimensions include distance to the Central
Business District (CBD), transportation facilities, commercial/shopping
centers, employment centers, health facilities, educational facilities,
recreational areas, as well as the conditions and accessibility to these
amenities. The results of this study provide practical implications for
improving the accuracy of property appraisal practices and offer a useful
reference for future research, particularly in data-limited contexts such
as Indonesia.
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