Spillover effects in neighborhood housing value change: a spatial analysis

Despite numerous studies on neighborhood change, the importance of spatial dependence has largely been overlooked. This study aims to examine spillover effects among neighborhood change factors, which means that demographic, housing, and socio-economic characteristics in nearby neighborhoods affect housing value change in a given neighborhood. In analyzing spillover effects, this study used the Neighborhood Change Data Base that includes decennial census data in the U.S. and employed a spatial Durbin model that can analyze both direct and indirect (spillover) effects of neighborhood change factors. The major findings are as follows: 1) neighborhood change factors have spillover effects; 2) the spillover effects are greater than the direct effects for demographic characteristics; 3) the spillover effects of housing and socio-economic characteristics are less dominant compared to those of demographic characteristics. Based on these findings, this study suggests that efforts to promote neighborhood revitalization and to prevent neighborhood decline should take into account spillover effects coming from surrounding neighborhoods.