IDEAS home Printed from https://ideas.repec.org/p/col/000561/019293.html
   My bibliography  Save this paper

Spatial heterogeneity of housing prices in formal and informal settlements: A GWR hedonic model for segmented markets in Cali

Author

Listed:
  • Vivas, H
  • Franco, A

Abstract

This paper studies the factors associated with differential prices in segmented housing markets. Despite the breadth of the literature addressing this issue, a gap remains in the investigation of differential prices in areas where formal and informal settlements coexist. Based on primary data from more than 550 households, we calibrated a Geographically Weighted Regressions (GWR) hedonic model in the District 18 of Cali, Colombia, as an approach for housing pricing in areas where heterogeneous occupation patterns prevail. The findings reveal that environmental quality, violence, accessibility to transportation, business and services, and household incomes are the variables that have the greatest impact on price structures in both the formal and informal sub-markets. In this regard, the model of price behavior developed in this research improves predictions and provides accurate information to policymakers about the factors associated with housing prices.

Suggested Citation

  • Vivas, H & Franco, A, 2021. "Spatial heterogeneity of housing prices in formal and informal settlements: A GWR hedonic model for segmented markets in Cali," Documentos de trabajo - Alianza EFI 19293, Alianza EFI.
    • Handle: RePEc:col:000561:019293
    as

    Download full text from publisher

    File URL: https://alianzaefi.com/download/spatial-heterogeneity-of-housing-prices-in-formal-and-informal-settlements-a-gwr-hedonic-model-for-segmented-markets-in-cali/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paavo Monkkonen & Lucas Ronconi, 2013. "Land Use Regulations, Compliance and Land Markets in Argentina," Urban Studies, Urban Studies Journal Limited, vol. 50(10), pages 1951-1969, August.
    2. Alain Durand Lasserve & Harris Selod, 2009. "The Formalization of Urban Land Tenure in Developing Countries," PSE-Ecole d'économie de Paris (Postprint) hal-00813117, HAL.
    3. Jan K. Brueckner & Harris Selod, 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 28-51, February.
    4. Robert M. Buckley & Jerry Kalarickal, 2006. "Thirty Years of World Bank Shelter Lending : What Have We Learned?," World Bank Publications - Books, The World Bank Group, number 7061, December.
    5. Nakamura, Shohei, 2017. "Tenure Security Premium in Informal Housing Markets: A Spatial Hedonic Analysis," World Development, Elsevier, vol. 89(C), pages 184-198.
    6. Inder Ruprah, 2011. "The Welfare Impacts of Social Housing Programs in Latin America: A Meta-impact Analysis," OVE Working Papers 0511, Inter-American Development Bank, Office of Evaluation and Oversight (OVE).
    7. César Patricio Bouillon (ed.), 2012. "Room for Development," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-03146-4.
    8. Galiani, Sebastian & Schargrodsky, Ernesto, 2010. "Property rights for the poor: Effects of land titling," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 700-729, October.
    9. Jean O. Lanjouw & Philip I. Levy, 2002. "Untitled: A Study of Formal and Informal Property Rights in Urban Ecuador," Economic Journal, Royal Economic Society, vol. 112(482), pages 986-1019, October.
    10. Eric Heikkila & Michael Lin, 2014. "An integrated model of formal and informal housing sectors," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 121-140, January.
    11. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    12. Talukdar, Debabrata, 2018. "Cost of being a slum dweller in Nairobi: Living under dismal conditions but still paying a housing rent premium," World Development, Elsevier, vol. 109(C), pages 42-56.
    13. Harvy Vivas, 2013. "Persistencia de la segregación residencial y composición del capital humano por barrios en la ciudad de Cali," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 31(70), pages 122-155, July.
    14. Benjamin Marx & Thomas Stoker & Tavneet Suri, 2013. "The Economics of Slums in the Developing World," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 187-210, Fall.
    15. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    16. Straszheim, Mahlon R, 1974. "Hedonic Estimation of Housing Market Prices: A Further Comment," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 404-406, August.
    17. Can, Ayse, 1992. "Specification and estimation of hedonic housing price models," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 453-474, September.
    18. Goodman, Allen C. & Thibodeau, Thomas G., 1998. "Housing Market Segmentation," Journal of Housing Economics, Elsevier, vol. 7(2), pages 121-143, June.
    19. Allen, Marcus T & Springer, Thomas M & Waller, Neil G, 1995. "Implicit Pricing across Residential Rental Submarkets," The Journal of Real Estate Finance and Economics, Springer, vol. 11(2), pages 137-151, September.
    20. Erica Field, 2005. "Property Rights and Investment in Urban Slums," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 279-290, 04/05.
    21. Danlin Yu & Yehua Dennis Wei & Changshan Wu, 2007. "Modeling Spatial Dimensions of Housing Prices in Milwaukee, WI," Environment and Planning B, , vol. 34(6), pages 1085-1102, December.
    22. Field, Erica Marie, 2005. "Property Rights and Investment in Urban Slums," Scholarly Articles 3634150, Harvard University Department of Economics.
    23. Jimenez, Emmanuel, 1984. "Tenure Security and Urban Squatting," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 556-567, November.
    24. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1399-1455, Elsevier.
    25. Luc Anselin & Nancy Lozano-Gracia, 2009. "Spatial Hedonic Models," Palgrave Macmillan Books, in: Terence C. Mills & Kerry Patterson (ed.), Palgrave Handbook of Econometrics, chapter 26, pages 1213-1250, Palgrave Macmillan.
    26. Nandinee Kutty, 2005. "A new measure of housing affordability: Estimates and analytical results," Housing Policy Debate, Taylor & Francis Journals, vol. 16(1), pages 113-142.
    27. Allen C. Goodman & Thomas G. Thibodeau, 2007. "The Spatial Proximity of Metropolitan Area Housing Submarkets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(2), pages 209-232, June.
    28. Dasgupta, Basab & Lall, Somik V., 2006. "Assessing benefits of slum upgrading programs in second-best settings," Policy Research Working Paper Series 3993, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brueckner, Jan K. & Rabe, Claus & Selod, Harris, 2019. "Backyarding: Theory and evidence for South Africa," Regional Science and Urban Economics, Elsevier, vol. 79(C).
    2. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    3. Nakamura, Shohei, 2017. "Tenure Security Premium in Informal Housing Markets: A Spatial Hedonic Analysis," World Development, Elsevier, vol. 89(C), pages 184-198.
    4. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1399-1455, Elsevier.
    5. Panman, Alexandra & Lozano Gracia, Nancy, 2022. "Titling and beyond: Evidence from Dar es Salaam, Tanzania," Land Use Policy, Elsevier, vol. 117(C).
    6. Brueckner, Jan K. & Mation, Lucas & Nadalin, Vanessa G., 2019. "Slums in Brazil: Where are they located, who lives in them, and do they ‘squeeze’ the formal housing market?," Journal of Housing Economics, Elsevier, vol. 44(C), pages 48-60.
    7. Galiani, Sebastián & Gertler, Paul J. & Undurraga, Raimundo & Cooper, Ryan & Martínez, Sebastián & Ross, Adam, 2017. "Shelter from the storm: Upgrading housing infrastructure in Latin American slums," Journal of Urban Economics, Elsevier, vol. 98(C), pages 187-213.
    8. Shohei Nakamura, 2017. "Does slum formalisation without title provision stimulate housing improvement? A case of slum declaration in Pune, India," Urban Studies, Urban Studies Journal Limited, vol. 54(7), pages 1715-1735, May.
    9. Harris Selod & Lara Tobin, 2018. "The spatial sorting of informal dwellers in cities in developing countries: Theory and evidence," Working Papers halshs-01703178, HAL.
    10. Hawley, Zackary & Miranda, Juan José & Sawyer, W. Charles, 2018. "Land values, property rights, and home ownership: Implications for property taxation in Peru," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 38-47.
    11. Brueckner, Jan K., 2013. "Urban squatting with rent-seeking organizers," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 561-569.
    12. Eric Heikkila & Michael Lin, 2014. "An integrated model of formal and informal housing sectors," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 121-140, January.
    13. Alves, Guillermo, 2021. "Slum growth in Brazilian cities," Journal of Urban Economics, Elsevier, vol. 122(C).
    14. Per G. Fredriksson & Satyendra Kumar Gupta & Weihua Zhao & Jim R. Wollscheid, 2023. "Legal heritage and urban slums," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 236-252, January.
    15. Paavo Monkkonen, 2012. "The Demand for Land Regularisation: Theory and Evidence from Tijuana, Mexico," Urban Studies, Urban Studies Journal Limited, vol. 49(2), pages 271-288, February.
    16. Brueckner, Jan K., 2013. "Slums in developing countries: New evidence for Indonesia," Journal of Housing Economics, Elsevier, vol. 22(4), pages 278-290.
    17. Jan K. Brueckner & Harris Selod, 2009. "A Theory of Urban Squatting and Land-Tenure Formalization in Developing Countries," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 28-51, February.
    18. Galiani Sebastian & Schargrodsky Ernesto, 2016. "The Deregularization of Land Titles," Man and the Economy, De Gruyter, vol. 3(2), pages 169-188, December.
    19. Nilopa Shah, 2014. "Squatting On Government Land," Journal of Regional Science, Wiley Blackwell, vol. 54(1), pages 114-136, January.
    20. Laura Jaitman, 2015. "Urban infrastructure in Latin America and the Caribbean: public policy priorities," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-57, December.

    More about this item

    Keywords

    Spatial heterogeneity; informal settlements; housing prices; Geographically WeightedRegressions (GWR); hedonic prices;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000561:019293. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alianza EFI (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.