Problems of spatial segregation have often stressed on the social status and social capital of a neighbourhood as main driving forces behind housing price formation. In this paper, it is assumed that spatial effects are additional variables worth considering since the impact of urban policies such as social housing policies and urban regeneration policies may permeate outside the areas where they are implemented. Our case study is of the urban area of Dijon (France), where these two types of urban policies have been implemented in the last three decades. Spatial effects are introduced in the hedonic model and a spatial error model is estimated, revealing a positive and significant global spatial effect combined with the usual influence of accessibility to the CBD. We also show the negative influence of location in social housing districts and the spatial diffusion effect they exert on neighbouring districts. Copyright (c) 2009 the author(s). Journal compilation (c) 2009 RSAI.
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