The Hedonic Analysis : an Application to the Belgian Housing Market

The goal of this master’s thesis is to build a hedonic model to analyse the Belgian housing market and in particular, the market for apartments. We will start by describing what the hedonic theory is and why it is useful. We will also present traditional price indices and the specificities of the housing market. A hedonic price index will be built through ordinary least squares regressions. With its help, we will see that prices of apartments, between 2011 and 2012 and at constant quality, have increased in some regions in Belgium. We will compare our results with another hedonic study about Belgium and with the re- sults from traditional price indices. This comparison will show some conclusions that can be drawn thanks to hedonic price indices. It will also show that they are absolutely needed if economists want to understand the real estate market rigorously.