Description:
<jats:p>A median‐based quantile estimator suffers less bias from positive outliers, such as unobserved renovations, than a standard mean‐based estimator. Quantile repeat‐sales estimates for single‐family homes in the city of Chicago show nominal price appreciation of 68.9% between 1993 and 2002, substantially smaller than the standard approach's estimate of 77.8%. Omitting observations with building permits reduces the mean and median‐based estimates by 4.4 and 1.6 percentage points. The results imply that quality improvements account for much of the rapid rise in house prices, and that a median‐based quantile estimator produces a more accurate view of the price performance of a typical house.</jats:p>