Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru

Attributing a rental value to the dwellings of homeowners is essential in various contexts, including distributional analysis and the compilation of national accounts, consumer price indexes (CPIs), and purchasing power parity indexes. One of the m...

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Main Authors:	Ceriani, Lidia, Olivieri, Sergio, Ranzani, Marco
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	HOUSING IMPUTED RENT RENTAL VALUE RENTAL MARKET HOMEOWNER SURVEY
Online Access:	http://documents.worldbank.org/curated/en/287901565890099664/Evaluating-the-Accuracy-of-Homeowner-Self-Assessed-Rents-in-Peru http://hdl.handle.net/10986/34370

id	okr-10986-34370
recordtype	oai_dc
spelling	okr-10986-343702022-08-16T00:26:33Z Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru Ceriani, Lidia Olivieri, Sergio Ranzani, Marco HOUSING IMPUTED RENT RENTAL VALUE RENTAL MARKET HOMEOWNER SURVEY Attributing a rental value to the dwellings of homeowners is essential in various contexts, including distributional analysis and the compilation of national accounts, consumer price indexes (CPIs), and purchasing power parity indexes. One of the methods for making the attribution is to use homeowner estimates of the market rental value they would pay (receive) for their dwellings if these were rented. This is known as homeowner self-assessed rent. However, homeowner estimates may not be accurate because of the way questions aimed at soliciting such information are phrased, the sentimental attachment of the homeowners to the properties, lack of information about rental markets, and other reasons. Yet, researchers and practitioners often neglect to ascertain the accuracy of homeowner assessments. This study argues that comparing unconditional or conditional means may be misleading if one has not ascertained whether the observable characteristics of homeowner and tenant dwellings are similar. Using Peruvian data from 2003 to 2017, the study tests the accuracy of self-assessed rental values with matching estimators. In Metropolitan Lima, homeowners typically provide accurate estimates of the rental market values of their dwellings. In rural areas, market rental values are underestimated by homeowners in more instances. The direction and magnitude of the inaccuracies in Metropolitan Lima and in rural areas are comparable and range between −25 percent and −20 percent. 2020-08-20T14:35:37Z 2020-08-20T14:35:37Z 2019-08 Working Paper http://documents.worldbank.org/curated/en/287901565890099664/Evaluating-the-Accuracy-of-Homeowner-Self-Assessed-Rents-in-Peru http://hdl.handle.net/10986/34370 English Policy Research Working Paper;No. 8983 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Peru
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	HOUSING IMPUTED RENT RENTAL VALUE RENTAL MARKET HOMEOWNER SURVEY
spellingShingle	HOUSING IMPUTED RENT RENTAL VALUE RENTAL MARKET HOMEOWNER SURVEY Ceriani, Lidia Olivieri, Sergio Ranzani, Marco Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru
geographic_facet	Latin America & Caribbean Peru
relation	Policy Research Working Paper;No. 8983
description	Attributing a rental value to the dwellings of homeowners is essential in various contexts, including distributional analysis and the compilation of national accounts, consumer price indexes (CPIs), and purchasing power parity indexes. One of the methods for making the attribution is to use homeowner estimates of the market rental value they would pay (receive) for their dwellings if these were rented. This is known as homeowner self-assessed rent. However, homeowner estimates may not be accurate because of the way questions aimed at soliciting such information are phrased, the sentimental attachment of the homeowners to the properties, lack of information about rental markets, and other reasons. Yet, researchers and practitioners often neglect to ascertain the accuracy of homeowner assessments. This study argues that comparing unconditional or conditional means may be misleading if one has not ascertained whether the observable characteristics of homeowner and tenant dwellings are similar. Using Peruvian data from 2003 to 2017, the study tests the accuracy of self-assessed rental values with matching estimators. In Metropolitan Lima, homeowners typically provide accurate estimates of the rental market values of their dwellings. In rural areas, market rental values are underestimated by homeowners in more instances. The direction and magnitude of the inaccuracies in Metropolitan Lima and in rural areas are comparable and range between −25 percent and −20 percent.
format	Working Paper
author	Ceriani, Lidia Olivieri, Sergio Ranzani, Marco
author_facet	Ceriani, Lidia Olivieri, Sergio Ranzani, Marco
author_sort	Ceriani, Lidia
title	Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru
title_short	Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru
title_full	Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru
title_fullStr	Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru
title_full_unstemmed	Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru
title_sort	evaluating the accuracy of homeowner self-assessed rents in peru
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/287901565890099664/Evaluating-the-Accuracy-of-Homeowner-Self-Assessed-Rents-in-Peru http://hdl.handle.net/10986/34370
_version_	1764480758007726080

Evaluating the Accuracy of Homeowner Self-Assessed Rents in Peru

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