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Estimation of a spatial simultaneous equation model of population migration and housing price dynamics

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  • Jeanty, P. Wilner
  • Partridge, Mark
  • Irwin, Elena

Abstract

Identifying the local interactions between housing prices and population migration is complicated by their simultaneous and spatially interdependent relationship. Higher housing prices may repel households and push them into neighboring areas, suggesting that separately identifying interactions within versus across local neighborhoods is important. Aggregate data and standard econometric models are unable to address the multiple identification problems that may arise from the simultaneity, spatial interaction, and unobserved spatial autocorrelation. Such problems can generate biased estimates that run counter to economic theory. Using Michigan census tract-level data, we estimate a spatial simultaneous equations model that jointly considers population change and housing values, while also explicitly modeling interactions within neighborhoods, spatial interactions across neighborhoods, and controlling for unobserved spatial correlations. After controlling for simultaneity and spatial autocorrelation, the results show that neighborhoods are likely to experience an increase in their housing values if they gain population and they are more likely to lose population if they experience an increase in housing values. Our results are consistent with theory and underscore the importance of accounting for spatial interdependencies between population change and housing values.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 40 (2010)
Issue (Month): 5 (September)
Pages: 343-352

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Handle: RePEc:eee:regeco:v:40:y:2010:i:5:p:343-352

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: Population change Housing prices Spatial dependence Spillovers Simultaneous equations Generalized method of moments Direct and indirect impacts Krinsky and Robb;

References

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Citations

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Cited by:
  1. Hernán Enríquez Sierra & Carlos Barreto Nieto & Carolina Correa Caro & Jacobo Campo Robledo, 2012. "PRECIO DEL SUELO Y REGALÍAS EN COLOMBIA: Un análisis espacial para los municipios productores de petróleo," DOCUMENTOS DE TRABAJO 010252, UNIVERSIDAD CATOLICA DE COLOMBIA.
  2. Simlai, Prodosh, 2014. "Estimation of variance of housing prices using spatial conditional heteroskedasticity (SARCH) model with an application to Boston housing price data," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 17-30.
  3. Bischoff, Oliver, 2012. "Explaining regional variation in equilibrium real estate prices and income," Journal of Housing Economics, Elsevier, vol. 21(1), pages 1-15.
  4. Partridge, Mark & Betz, Mike, 2012. "Country Road Take Me Home: Migration Patterns in the Appalachia America and Place-Based Policy," MPRA Paper 38293, University Library of Munich, Germany.
  5. Alexandre Xavier Ywata De Carvalho & Guilherme Mendes Resende & Patrícia Alessandra Morita Sakowski, 2014. "Evaluating Multiple Spatial Dimensionsof Economic Growth In Brazil Using Spatial Panel Data Models, 1970-2000," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 179, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  6. Enríquez Sierra, Hernán & Campo Robledo, Jacobo, 2012. "Equilibrio regional y patrones de migración para el continente americano 1960 - 2005: Análisis espacial por panel de datos
    [Regional equilibrium and migration patterns in the Americas 1960 - 2005
    ," MPRA Paper 43433, University Library of Munich, Germany, revised 2012.
  7. Karolien De Bruyne & Jan Van Hove, 2013. "Explaining the spatial variation in housing prices: an economic geography approach," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1673-1689, May.
  8. Yong Chen & Lena Etuk & Bruce Weber, 2013. "Are small communities at risk of population loss?," The Annals of Regional Science, Springer, vol. 51(2), pages 343-353, October.
  9. Roberto Camagni & Roberta Capello & Andrea Caragliu, 2013. "One or infinite optimal city sizes? In search of an equilibrium size for cities," The Annals of Regional Science, Springer, vol. 51(2), pages 309-341, October.
  10. Stephens, Heather & Partridge, Mark, 2012. "Lake Amenities, Environmental Degradation, and Great Lakes Regional Growth," MPRA Paper 43903, University Library of Munich, Germany.
  11. Plantinga, Andrew J. & Détang-Dessendre, Cécile & Hunt, Gary L. & Piguet, Virginie, 2013. "Housing prices and inter-urban migration," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 296-306.
  12. P. Wilner Jeanty, 2012. "Stata implementation of the non-parametric spatial heteroskedasticity and autocorrelation consistent estimator," SAN12 Stata Conference 24, Stata Users Group.
  13. Liao, Wen-Chi & Wang, Xizhu, 2012. "Hedonic house prices and spatial quantile regression," Journal of Housing Economics, Elsevier, vol. 21(1), pages 16-27.
  14. Jeanty, P. Wilner & Ulimwengu, John Mususa, 2011. "Poverty rate and government income transfers: A spatial simultaneous equations approach," IFPRI discussion papers 1076, International Food Policy Research Institute (IFPRI).
  15. Hernán Enríquez Sierra & Jacobo Campo Robledo, 2013. "Regional equilibrium and migration patterns in the Americas 1960-2005: Spatial data panel analysis," WORKING PAPERS 010478, UNIVERSIDAD SERGIO ARBOLEDA.

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