An Econometric Model for the Analysis of the Influence of the Refurbishment Costs on Housing Prices

Abstract

With reference to the Italian context, the present research intends to analyze the functional relationships between the unit cost of restructuring and the selling prices in the residential segment. The analysis has been contextualized to the three clusters (Northern Italy, Central Italy, Southern Italy and Islands) in which the Italian territory is commonly divided. The case study concerns 965 residential units sold in the first half of 2019 and located in the 103 provincial capitals. The implemented econometric technique is a data-driven method that employs a genetic algorithm and allows the identification of the most influencing factors among the explanatory variables considered. For each cluster, a model has been selected in order to study the influence of unit cost of restructuring on housing prices.