characteristics of a property. Each property's atypicality is computed based on the

hedonic equation's coefficients, and the formula provided in Glower, Haurin and

Hendershott (1998)


 Y exp(a + b,h,) exp(a + b,hb)
ATYP = '


*100%


(20)


 The property atypicality measure, A TYP is presented as percentage of selling price

(SP); h, are the physical characteristics, h1, are the mean values of these characteristics,

and a and b, are the intercept and the slope estimates from the hedonic regression (Ibid.).

The hedonic equation used has the following form

 LNPRICkE = a + ajAGE+ a2AGE2 + a3SQFT+ a4SQFT2
 + a5LANDSQFT+ a6LANDSQF72 + a7PARKING
 3
 + a8FLOORS+ a9UNITS+ Z /,CONDITION + a SENIOR
 i=2
 + a SUBSIDIZED+ al2CONDO (21)

Location characteristics are excluded. The fundamental value of a property is presented

by the value predicted from a hedonic price equation based on a sample of apartment

properties sold across all markets that are not associated with any conditions, completed

with out-of-state buyers, or part of an exchange.

 Next, I include the atypicality measure in the model specified by the equation

 LNPRICF = ao + xaEXREPL+ a2EXRELQ+ o3RELQ_REPL+ 3BUYEROUT+ a9A TYP+
 P<43 r r k
 + 1,SMDUM,+ y 1k,(Xk Y) (22)
 s=2 k=01=0
 The estimated coefficients from this model are not different from the ones

estimated with OLS Model II. This leads us to conclude that OLS Model II is well

specified.