Econmetrics Essay Example | Topics and Well Written Essays - 250 words

Econmetrics - Essay ExampleFor instance, when a property undergoes growth, the price of houses goes up. On the former(a) hand, when a property undergoes decay, the price of houses goes down. Thus, these stack will affect the general value of houses severely.Demand for houses is a vital aspect in the model. In situations when the demand for houses exceeds the available houses in the market, the price of houses increases as people willingness to purchase also increase. As the demand for houses reduces, the price of houses also reduces since people will not have the will to purchase.Supply of houses has always surpassed its demand. For instance, when the deliver of houses increases, the price of houses goes down since the property owners will need to off-load the houses in their possession. Thus, increase in supply will create or rather offer opportunities for the electric potential buyers in the real estate market.The regression principle in real estate refers to a high value proper ty, in a location of depression value property, being affected by the lower price of houses in the neighborhood. The real values of such houses atomic number 18 not always achieved.On the other hand, the progression principle refers to the increase in the general value of a low value house which is located among the houses of higher value. Thus, the low value houses are always priced relatively higher than their real prices.Therefore, the econometric model House price= Demographic changes + Demand + Supply + Progression + Regression, is a statistical model. The drug-addicted variable (House Price) on the left hand side is fully getd by the independent variables (Demographic changes, Demand, Supply, Progression, and Regression) on the right hand side. The independent variables are the factors that determine the value of houses in the real