Non-linearities and interaction effects in Belgian residential rents: an explainable artificial intelligence approach

Grounded in hedonic pricing theory, this study examines non-linear and heterogeneous relationships in residential rents. Using 78,788 Belgian rental listings from 2022 as an empirical application, we compare a linear Ridge model with CatBoost and interpret CatBoost using SHapley Additive exPlanations (SHAP). CatBoost predicts rents more accurately, while SHAP dependence plots suggest a threshold-like association with energy consumption, a U-shaped build-year profile and housing-type heterogeneity in the mobility-score relationship. These findings illustrate how flexible, black-box models with SHAP can complement conventional hedonic specifications.

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Publication Details

Journal
Applied Economics Letters
Published
2026-11-02
DOI
https://doi.org/10.1080/13504851.2026.2758727
Primary Topic
Housing Market and Economics
Type
article
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article

Non-linearities and interaction effects in Belgian residential rents: an explainable artificial intelligence approach

Lieven De Moor, Ian Lenaers
Applied Economics Letters
Housing Market and Economics
article

Non-linearities and interaction effects in Belgian residential rents: an explainable artificial intelligence approach

Lieven De Moor, Ian Lenaers
article en

Abstract

Grounded in hedonic pricing theory, this study examines non-linear and heterogeneous relationships in residential rents. Using 78,788 Belgian rental listings from 2022 as an empirical application, we compare a linear Ridge model with CatBoost and interpret CatBoost using SHapley Additive exPlanations (SHAP). CatBoost predicts rents more accurately, while SHAP dependence plots suggest a threshold-like association with energy consumption, a U-shaped build-year profile and housing-type heterogeneity in the mobility-score relationship. These findings illustrate how flexible, black-box models with SHAP can complement conventional hedonic specifications.

Applied Economics Letters
Vrije Universiteit Brussel (BE)
Openalex Percentile: Top 11%
Housing Market and Economics
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