Measuring the Value of a Moscow Apartment: a Spatial Approach to the Hedonic Pricing of Attributes
AbstractIn this paper we explore spatial effects in a hedonic price function framework for a large sample of apartments in Moscow. We find strong evidence of both spatial lag and spatial autocorrelation. Our results are robust across both the spatial model specifications and the choice of the spatial weight matrices. The fact that the quality attributes’ shadow prices we estimate are not much different from the OLS (ML) estimates suggests that spatial effects are orthogonal to the quality characteristics. One interesting finding is that an increase in the kitchen area contributes much more significantly to the apartment’s price compared a marginal increase in the living area, which is reflecting the traditional role kitchen has been playing in the Russian households as a dining and communication area. House type, time needed to walk to the nearest subway station and subway time to the city center are other important apartment attributes. Methodologically, we believe our study is demonstrating the need to develop spatial econometric techniques for application in the environment where both types of spatial effects are simultaneously present.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 9438.
Date of creation: Mar 2008
Date of revision:
spatial models; housing market; hedonic price functions;
Other versions of this item:
- Alexandre Repkine, 2008. "Measuring the Value of a Moscow Apartment A Spatial Approach to the Hedonic Pricing of Attributes," EERI Research Paper Series EERI_RP_2008_16, Economics and Econometrics Research Institute (EERI), Brussels.
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-31 (All new papers)
- NEP-GEO-2008-08-31 (Economic Geography)
- NEP-URE-2008-08-31 (Urban & Real Estate Economics)
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