An Empirical Research Applying Hedonic Pricing Model: Albanian Case

Abstract

Based on the fact that that global literature accepts that still does not exist one best method of property evaluation, and on the lack of previous research paper on property evaluation in Albania, this research addresses several main questions. It is concerned with theoretical dimension of property evaluation in both theoretical and practical dimension. More importantly the paper assesses the most important factors to consider when doing property valuation in Albania. Methodologically this thesis conducts an extensive literature and an empirical research in Albanian context. For conducting the empirical research a hedonic pricing model is used, integrated in a multiple linear regression statistical approach. Data for selected variables, as predictor of property price level have been gathered from two real estate agencies located in Tirana. Based on the results the paper develops two models of property evaluation, where one of them has improved statistical indicators. The paper concludes that theory and practice of property evaluation have evaluated and have been improved during years, by concluding in the most used methods: Hedonist Models. Finally the paper concludes that Floors, Parking facilities, and Number of rooms, are the statistically significant variables in predicting price level of property in Albania.