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Spatial Association and Heterogeneity Issues in Land Price Models

Author

Listed:
  • Antonio Paez

    (Laboratory for Regional Planning and Applications, Graduate School of Engineering, Tohoku University, Aoba 06, Aoba-ku, Sendai 980-8579, Japan, antonio@rs.civil.tohoku.ac.jp)

  • Takashi Uchida

    (Laboratory for Regional Planning and Applications, Graduate School of Engineering, Tohoku University, Aoba 06, Aoba-ku, Sendai 980-8579, Japan, uchida@plan.civil.tohoku.ac. jp)

  • Kazuaki Miyamoto

    (Socioeconomic Studies and the Centre for Northeast Asian Studies, Tohoku University, Kawauchi, Aoba-ku, Sendai 980-8576, Japan, miyamoto@plan.civil.tohoku.ac.jp)

Abstract

Urban planners frequently use regression analysis for the empirical estimation of land price models, which are used to investigate the spatial structure of a city or to calculate the implicit price of environmental characteristics. A concern with this kind of analysis is that often spatially associated or heterogeneous data are used, which leads to estimation pitfalls, most notably spatial autocorrelation and model structural instability over space. In this paper, we introduce a modelling methodology that combines a spatial autoregression with a switching regression to incorporate effectively both association and heterogeneity as part of the analysis. In addition, using Sendai City in north-eastern Japan as a case study, we use local statistics of spatial association to assist us in the exploration and definition of heterogeneous regimes. Finally, we show how some measures commonly used to counter spatial effects fail at times, thus highlighting the importance of a spatial modelling methodology such as the one presented here.

Suggested Citation

  • Antonio Paez & Takashi Uchida & Kazuaki Miyamoto, 2001. "Spatial Association and Heterogeneity Issues in Land Price Models," Urban Studies, Urban Studies Journal Limited, vol. 38(9), pages 1493-1508, August.
    • Handle: RePEc:sae:urbstu:v:38:y:2001:i:9:p:1493-1508
    DOI: 10.1080/00420980126668
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    References listed on IDEAS

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    2. Laure Latruffe & Jean Joseph Minviel & Julien Salanié, 2013. "The role of environmental and land transaction regulations on agricultural land price: The example of the French region Brittany," Working Papers SMART 13-11, INRAE UMR SMART.
    3. Chasco, Coro & Le Gallo, Julie & López, Fernando A., 2018. "A scan test for spatial groupwise heteroscedasticity in cross-sectional models with an application on houses prices in Madrid," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 226-238.
    4. Tan, Ronghui & He, Qingsong & Zhou, Kehao & Xie, Peng, 2019. "The effect of new metro stations on local land use and housing prices: The case of Wuhan, China," Journal of Transport Geography, Elsevier, vol. 79(C), pages 1-1.

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