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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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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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  14. Mindy S. Crandall & Bruce A. Weber, 2004. "Local Social and Economic Conditions, Spatial Concentrations of Poverty, and Poverty Dynamics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1276-1281.
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Citations

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Cited by:
  1. Stephens, Heather & Partridge, Mark, 2012. "Lake Amenities, Environmental Degradation, and Great Lakes Regional Growth," MPRA Paper 43903, University Library of Munich, Germany.
  2. 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.
  3. Oliver Bischoff, 2010. "Explaining Regional Variation in Equilibrium Real Estate Prices and Income," Working Papers 036, Chair for Economic Policy, University of Hamburg.
  4. Hernán Enríquez Sierra & Carlos Barreto Nieto & Carolina Correa Caro & Jacobo Campo Robledo, 2013. "Precio del suelo y regalías en Colombia: un análisis espacial para los municipios productores de petróleo," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE.
  5. 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.
  6. Guilherme Mendes Resende & Alexandre Xavier Ywata de Carvalho & Patrícia Alessandra Morita Sakowski, 2013. "Evaluating Multiple Spatial Dimensions of Economic Growth in Brazil Using Spatial Panel Data Models (1970 - 2000)," Discussion Papers 1830a, Instituto de Pesquisa Econômica Aplicada - IPEA.
  7. P. Wilner Jeanty, 2012. "Stata implementation of the non-parametric spatial heteroskedasticity and autocorrelation consistent estimator," SAN12 Stata Conference 24, Stata Users Group.
  8. 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.
  9. Liao, Wen-Chi & Wang, Xizhu, 2012. "Hedonic house prices and spatial quantile regression," Journal of Housing Economics, Elsevier, vol. 21(1), pages 16-27.
  10. 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.
  11. 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).
  12. 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.
  13. 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.

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