Format of hedonistic model for estimating the normal sales value of real estate

The determination of the value of a home is a difficult exercise for various reasons. However, in recent years, a lot of progress has been made regarding statistical techniques that can be used as a tool for determining the actual sales value. The most common technique for a model valuation is the use of hedonic pricing models. These have various applications. This method mainly allows you to study three elements:

1. it allows to create a hedonistic price index, which shows how the price of an identical home evolves over time
2. monetary valuation of housing characteristics, environmental characteristics and transactional characteristics on the property price. Thus, the method is often used to analyze the actual willingness of households to pay  for environmental factors (green, windmills, heritage, ...) as derived from the negative and positive influence of that environmental factor on the sale price of a home.
3. accurately predict the market value of the property itself (even though it is not sold).

The last scope is central to this project. It is important to mention that there is a wide range of methods and options for performing a hedonic price analysis, which are often dependent on the application of the research. The output of the hedonic pricing model consists of specific valuations of all structural and environmental characteristics. In order to calculate market value, these valuations must be combined with the structural and environmental characteristics of the property.