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Bayesian quantile regression analysis of Korean Jeonse deposit
Commun. Stat. Appl. Methods, CSAM 2018;25:489-499
Published online September 30, 2018
© 2018 Korean Statistical Society.

Eun Jung Nama, Eun Kyung Leea, Man-Suk Oh1, a

aDepartment of Statistics, Ewha Womans University, Korea
Correspondence to: Department of Statistics, Ewha Womans University, 52, Ewhayeodae-gil, Seodaemun-gu, Seoul 03760, Korea. E-mail: msoh@ewha.ac.kr
Received February 20, 2018; Revised July 25, 2018; Accepted August 10, 2018.
 Abstract
Jeonse is a unique property rental system in Korea in which a tenant pays a part of the price of a leased property as a fixed amount security deposit and gets back the entire deposit when the tenant moves out at the end of the tenancy. Jeonse deposit is very important in the Korean real estate market since it is directly related to the residential property sales price and it is a key indicator to predict future real estate market trend. Jeonse deposit data shows a skewed and heteroscedastic distribution and the commonly used mean regression model may be inappropriate for the analysis of Jeonse deposit data. In this paper, we apply a Bayesian quantile regression model to analyze Jeonse deposit data, which is non-parametric and does not require any distributional assumptions. Analysis results show that the quantile regression coefficients of most explanatory variables change dramatically for different quantiles. The regression coefficients of some variables have different signs for different quantiles, implying that even the same variable may affect the Jeonse deposit in the opposite direction depending on the amount of deposit.
Keywords : real estate, Bayesian analysis, quantile regression, apartment rent