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+% Author: Simon-Pierre Boucher — contact@spboucher.ai |
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+% ============================================================================ |
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+% UQO Working Paper No. 11 |
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+% Half a Million Prices, Twenty Models |
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+% |
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+% Build: latexmk -pdf main.tex (or `make` in this directory) |
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+% Figures are read from ../figures/, tables from ../results/tables/. |
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+% ============================================================================ |
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+\documentclass[12pt,letterpaper]{article} |
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+ |
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+\usepackage[utf8]{inputenc} |
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+\usepackage[T1]{fontenc} |
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+\usepackage[english]{babel} |
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+ |
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+\usepackage[letterpaper,margin=1in]{geometry} |
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+\usepackage{setspace} |
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+\onehalfspacing |
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+ |
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+\usepackage{mathptmx} |
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+\usepackage{microtype} |
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+ |
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+\usepackage{amsmath,amssymb,amsthm} |
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+ |
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+\usepackage{booktabs} |
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+\usepackage{threeparttable} |
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+\usepackage{makecell} |
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+ |
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+\usepackage{graphicx} |
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+\usepackage{subcaption} |
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+\graphicspath{{../figures/}{./}} |
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+ |
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+\usepackage[font=small,labelfont=bf,labelsep=period,justification=justified,singlelinecheck=false]{caption} |
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+ |
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+\usepackage[dvipsnames]{xcolor} |
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+\usepackage[colorlinks=true,linkcolor=NavyBlue,citecolor=NavyBlue,urlcolor=NavyBlue,breaklinks=true]{hyperref} |
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+ |
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+\usepackage[authoryear,round,semicolon]{natbib} |
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+\bibliographystyle{aer} |
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+ |
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+\usepackage{titlesec} |
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+\titleformat{\section}{\large\bfseries}{\thesection.}{0.5em}{} |
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+\titleformat{\subsection}{\normalsize\bfseries}{\thesubsection.}{0.5em}{} |
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+\titleformat{\subsubsection}{\normalsize\itshape}{\thesubsubsection.}{0.5em}{} |
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+\usepackage{fancyhdr} |
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+\pagestyle{fancy}\fancyhf{} |
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+\renewcommand{\headrulewidth}{0pt} |
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+\fancyfoot[C]{\thepage} |
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+\usepackage{enumitem} |
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+\setlist{nosep,leftmargin=*} |
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+ |
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+% ============================================================================ |
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+% METADATA |
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+% ============================================================================ |
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+\newcommand{\WPnumber}{11} |
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+\newcommand{\WPtitle}{Half a Million Prices, Twenty Models} |
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+\newcommand{\WPsubtitle}{A Systematic Assessment of Hedonic Specifications and |
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+ Estimation Methods for the Quebec Housing Market, 2021--2026} |
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+\newcommand{\WPdate}{August 2026} |
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+\newcommand{\WPversion}{1.0} |
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+\newcommand{\WPkeywords}{hedonic pricing, functional form, house price indexes, machine learning, automated valuation, out-of-sample prediction} |
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+\newcommand{\WPjel}{R31, C21, C52, C53} |
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+ |
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+\newcommand{\WPauthor}{Simon-Pierre Boucher} |
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+\newcommand{\WPaffiliation}{D\'epartement des sciences administratives\\ |
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+ Universit\'e du Qu\'ebec en Outaouais} |
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+\newcommand{\WPemail}{simon-pierre.boucher@uqo.ca} |
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+\newcommand{\WPaddress}{Gatineau -- Pavillon Alexandre-Tach\'e\\ |
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+ 283, boulevard Alexandre-Tach\'e\\ Gatineau, Qu\'ebec, Canada J9A 1L8} |
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+ |
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+\newcommand{\WPabstract}{% |
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+Fifty years after \mbox{Rosen (1974)}, applied hedonic practice still rests |
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+on a series of specification choices --- functional form, temporal controls, |
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+spatial controls, estimation method --- that are usually made by convention |
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+and rarely stress-tested jointly. Using 514{,}212 Quebec residential sales |
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+(2021--2026) whose structural descriptors come from the provincial |
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+assessment roll, we run a controlled horse race of twenty hedonic models |
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+organised along those four axes, scoring every model on identical holdouts |
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+and on the same price-level scoreboard (log models are Duan-retransformed, |
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+Box--Cox inverted). Four lessons emerge. (1)~Functional form is a |
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+second-order choice: from linear to splines, the median absolute error |
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+spans 16.5--18.6\%, and the data-driven Box--Cox exponent |
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+($\hat\lambda=0.25$) buys nothing out of sample. (2)~Controls are |
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+first-order: dropping spatial fixed effects costs ten error points --- |
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+location granularity matters far more than curvature, but only up to the |
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+point where cells thin out (a $\sim$1~km grid \emph{overfits}). |
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+(3)~Under random validation, estimation method matters most: gradient |
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+boosting reaches 14.4\% --- a 13\% improvement over the best linear model |
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+--- with random forests close behind, and coordinates alone reproduce |
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+what thousands of dummies buy. (4)~But the ranking is an artifact of the |
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+split: under a forward-in-time holdout (train $<$~2025, test 2025--26) |
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+every model degrades and the machine-learning advantage \emph{reverses} |
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+--- the spline hedonic posts a lower median error than gradient boosting |
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+and an identical log-scale $R^2$ --- a stark warning against evaluating |
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+valuation models with random cross-validation alone. Constant-quality |
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+monthly indices implied by the competing forms agree to within a few |
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+index points, and the boosted model's implicit age and floor-area |
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+profiles track the quadratic OLS closely --- interpretation and |
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+prediction disagree less than the random-validation gap suggests.} |
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+ |
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+\hypersetup{pdftitle={Half a Million Prices, Twenty Models}, pdfauthor={}} |
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+ |
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+% Self-reference neutralised in the anonymous version (main_anon.tex) |
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+\newcommand{\companionpaper}{a companion paper by the same authors (reference withheld for review)} |
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+ |
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+\begin{document} |
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+ |
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+\input{sections/titlepage_anon} |
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+ |
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+\setcounter{page}{1} |
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+\input{sections/introduction} |
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+\input{sections/literature} |
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+\input{sections/data} |
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+\input{sections/methodology} |
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+\input{sections/results} |
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+\input{sections/extensions} |
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+\input{sections/discussion} |
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+\input{sections/conclusion} |
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+ |
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+\newpage |
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+\bibliography{references} |
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+ |
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+\end{document} |