were about 9 percent higher in the Bureau of Economic Analysis data relative to the data of the Bureau of Labor Statistics. In addition, they find that the two data series consistently grew apart from 1992 to 2000. As underlined by Garner and Short (2001), the reason for this mismatch may be that respondents in both cases have mistaken and biased ideas about the market values of their dwellings or that the reported rental equivalence values are likely to be capturing variations in housing and neighborhood quality that hedonic approaches do not capture. Corradin, Fillat, and Vergara-Alert 2017 make an argument that is similar to the latter point. Moreover, owners may express above-market evaluations of their dwellings because of a special attachment for specific features of their homes, especially if they designed or built the homes. Heston and Nakamura (2009) call this the owner pride factor. Van der Cruijsen, Jansen, and van Rooij (2018) provide a review of possible behavioral reasons beyond the bias of homeowner valuations. They compare the self-assessed homeowner valuations with appraisals of the same housing administrated by the municipality to which the housing belongs for tax purposes. They find that the median respondent overestimates the true value by 11 percent.

Sometimes, the same survey supplies enough information to check the accuracy of homeowner selfassessments. Van der Cruijsen, Jansen, and van Rooij (2018) and Gao and Liang (2019) compare the two sets of values reported by respondents in, respectively, the DNB Household Survey in the Netherlands and the China Household Finance Survey: the self-assessed current value and the purchase price for the same dwelling, which is updated using an evaluation of the fluctuations in housing prices in the same neighborhood or region over time. Both contributions find that households systematically overestimate their home values. Benítez-Silva et al. (2015) exploit the longitudinal panel structures of the Health and Retirement Study and the American Housing Survey and are able to compare the transaction prices at a given time and self-reported housing values before the sales of the same housing. They conclude that homeowners, on average, overestimate the current values of their properties by around 8 percent. Arévalo and Ruiz-Castillo (2006) compare self-assessed values with the results of a hedonic model on the same dwellings in Spain, calibrating the model on the reported rents paid by tenants in the same survey. They find that, on average, self-assessed values are close to the results of the hedonic model.

This paper proposes the use of matching estimators to assess the accuracy of homeowner self-assessed rents based only on the information available in household budget surveys, thus departing from most of the existing literature. This represents an important advantage because researchers and practitioners working on rent imputation in developing countries are left with few sources of information, and there are often no alternative surveys, reliable administrative data on market transactions or tax assessments, or data collected through professional appraisals. The paper argues that ensuring homeowner and tenant dwellings exhibit similar characteristics is key for an accurate comparison, and attention should therefore be paid to the choice of the comparison groups to avoid comparing the incomparable.

# **3. The Housing Market in Peru**

This section briefly describes trends in the housing market in Peru in the recent past. The housing market has been dynamic. The dynamism has been driven by a rapid process of urbanization, changes in policies, and robust growth in the construction sector. The current process of urbanization started in the mid-1950s, when the rural population began moving from the Andes toward Lima Province, in which the capital is located. The urban population grew from about 47 percent of the country’s population in 1960 to almost 78 percent in 5