Bayesians in Space: Using Bayesian Methods to Inform Choice of Spatial Weights Matrix in Hedonic Property Analyses
AbstractThe choice of weights is a non-nested problem in most applied spatial econometric models. Despite numerous recent advances in spatial econometrics, the choice of spatial weights remains exogenously determined by the researcher in empirical applications. Bayesian techniques provide statistical evidence regarding the simultaneous choice of model specification and spatial weights matrices by using posterior probabilities. This paper demonstrates the Bayesian estimation approach in a spatial hedonic property model estimating the impacts of repeated wildfires on house prices in Southern California. We find that improper choice of spatial model and weights can result in up to 5% difference in estimated coefficients and in our case study up to a $15 Million difference in total benefits of reducing wildfires in Los Angeles County.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Southern Regional Science Association in its journal Review of Regional Studies.
Volume (Year): 40 (2010)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.srsa.org
Spatial Hedonic Models; Wildfires; Bayesian Estimation;
Find related papers by JEL classification:
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Loomis, John B. & Mueller, Julie M., 2013. "A Spatial Probit Modeling Approach to Account for Spatial Spillover Effects in Dicotomous Choice Contingent Valuation Surveys," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45(01), February.
- Zhen Xu & G. Cornelis van Kooten, 2013. "Living with Wildfire: The Impact of Historic Fires on Property Values in Kelowna, BC," Working Papers 2013-05, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
- Seya, Hajime & Yamagata, Yoshiki & Tsutsumi, Morito, 2013. "Automatic selection of a spatial weight matrix in spatial econometrics: Application to a spatial hedonic approach," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 429-444.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark L. Burkey).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.