Housing renovations and the quantile repeat-sales price index

Daniel P. McMillen, Paul Thorsnes

Research output: Contribution to journalArticlepeer-review


A median-based quantile estimator suffers less bias from positive outliers, such as unobserved renovations, than a standard mean-based estimator. Quantile repeat-sales estimates for single-family homes in the city of Chicago show nominal price appreciation of 68.9% between 1993 and 2002, substantially smaller than the standard approach's estimate of 77.8%. Omitting observations with building permits reduces the mean and median-based estimates by 4.4 and 1.6 percentage points. The results imply that quality improvements account for much of the rapid rise in house prices, and that a median-based quantile estimator produces a more accurate view of the price performance of a typical house.

Original languageEnglish (US)
Pages (from-to)567-584
Number of pages18
JournalReal Estate Economics
Issue number4
StatePublished - Dec 2006
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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