Urban amenities and dwelling house prices in Sao Paulo, Brazil: a hierarchical modelling approach

Literature on hedonic prices has not reached a consensus about how the characteristics of the properties and their respective locations influence prices and their evolution over time. Under the initial hypotheses of variations in the prices of properties being launched and not traded in recent years, and that these alterations occur in function of each property's characteristics and differences among districts, this study proposes, through hierarchical modelling with repeated measures, an approach to analyse the random effects as an alternative to assess the evolution in the logarithm of residential property prices in Sao Paulo. Using a sample of 2,500 properties from 50 districts in a five-year period (2005-2009), totalling 7,743 observations, multilevel representativeness is found for the effects of the properties' and districts' characteristics, considering the differentiation of mean prices and these prices' evolution rates over the years.