Spatial Interactions in Hedonic Pricing Models

TY - JOUR

T1 - Spatial Interactions in Hedonic Pricing Models

T2 - Spatial Economic Analysis

AU - Bhattacharjee,Arnab

AU - Castro,Eduardo

AU - Marques,Joao

PY - 2012/3

Y1 - 2012/3

N2 - <p>Spatial heterogeneity, spatial dependence and spatial scale constitute key features of spatial analysis of housing markets. However, the common practice of modelling spatial dependence as being generated by spatial interactions through a known spatial weights matrix is often not satisfactory. While existing estimators of spatial weights matrices are based on repeat sales or panel data, this paper takes the approach to a cross-section setting. Specifically, based on an a priori definition of housing submarkets and the assumption of a multifactor model, toe develop maximum likelihood methodology to estimate hedonic models that facilitate understanding of both spatial heterogeneity and spatial interactions. The methodology, based on statistical orthogonal factor analysis, applied to the urban housing market of Aveiro (Portugal) at two different spatial scales, provides exciting inferences on the spatial structure of the housing market.</p>

AB - <p>Spatial heterogeneity, spatial dependence and spatial scale constitute key features of spatial analysis of housing markets. However, the common practice of modelling spatial dependence as being generated by spatial interactions through a known spatial weights matrix is often not satisfactory. While existing estimators of spatial weights matrices are based on repeat sales or panel data, this paper takes the approach to a cross-section setting. Specifically, based on an a priori definition of housing submarkets and the assumption of a multifactor model, toe develop maximum likelihood methodology to estimate hedonic models that facilitate understanding of both spatial heterogeneity and spatial interactions. The methodology, based on statistical orthogonal factor analysis, applied to the urban housing market of Aveiro (Portugal) at two different spatial scales, provides exciting inferences on the spatial structure of the housing market.</p>

KW - Spatial interactions and heterogeneity

KW - spatial weights matrix

KW - spatial hedonic model

KW - statistical factor analysis

KW - AIR-QUALITY

KW - PRICES

KW - REGRESSION

KW - SPECIFICATION

KW - DEPENDENCE

KW - GEOGRAPHY

KW - DEMAND

KW - PANELS

KW - TESTS

U2 - 10.1080/17421772.2011.647058

DO - 10.1080/17421772.2011.647058

M3 - Article

VL - 7

SP - 133

EP - 167

JO - Spatial Economic Analysis

JF - Spatial Economic Analysis

SN - 1742-1772

IS - 1

ER -