Spatial Interactions in Hedonic Pricing Models: The Urban Housing Market of Aveiro, Portugal

Arnab Bhattacharjee, Eduardo Castro, Joao Marques

    Research output: Contribution to journalArticle

    20 Citations (Scopus)

    Abstract

    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.

    Original languageEnglish
    Pages (from-to)133-167
    Number of pages35
    JournalSpatial Economic Analysis
    Volume7
    Issue number1
    DOIs
    Publication statusPublished - Mar 2012

    Keywords

    • Spatial interactions and heterogeneity
    • spatial weights matrix
    • spatial hedonic model
    • statistical factor analysis
    • AIR-QUALITY
    • PRICES
    • REGRESSION
    • SPECIFICATION
    • DEPENDENCE
    • GEOGRAPHY
    • DEMAND
    • PANELS
    • TESTS

    Cite this

    Bhattacharjee, Arnab ; Castro, Eduardo ; Marques, Joao. / Spatial Interactions in Hedonic Pricing Models : The Urban Housing Market of Aveiro, Portugal. In: Spatial Economic Analysis. 2012 ; Vol. 7, No. 1. pp. 133-167.
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    abstract = "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.",
    keywords = "Spatial interactions and heterogeneity, spatial weights matrix, spatial hedonic model, statistical factor analysis, AIR-QUALITY, PRICES, REGRESSION, SPECIFICATION, DEPENDENCE, GEOGRAPHY, DEMAND, PANELS, TESTS",
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    Spatial Interactions in Hedonic Pricing Models : The Urban Housing Market of Aveiro, Portugal. / Bhattacharjee, Arnab; Castro, Eduardo; Marques, Joao.

    In: Spatial Economic Analysis, Vol. 7, No. 1, 03.2012, p. 133-167.

    Research output: Contribution to journalArticle

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    AU - Castro, Eduardo

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    KW - DEPENDENCE

    KW - GEOGRAPHY

    KW - DEMAND

    KW - PANELS

    KW - TESTS

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