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Hierarchy and spatial autocorrelation effects in hedonic models

Author

Listed:
  • Coro Chasco

    (Universidad Autónoma de Madrid)

  • Julie Le Gallo

    (Université de Franche-Comté)

Abstract

Hedonic housing price models should deal with spatial autocorrelation in order to avoid bias and inconsistency in the coefficient estimates. Multilevel models have been presented as a way of properly considering the effects of neighbourhood amenities operating at different spatial hierarchies. In this paper, we test this feature by specifying a three-level model for a dataset on downtown Madrid, which includes spatially lagged explanatory variables. The results show that hierarchical models are not capable of fully capturing spatial autocorrelation so that more effort should be done in developing the appropriate spatial multilevel models.

Suggested Citation

  • Coro Chasco & Julie Le Gallo, 2012. "Hierarchy and spatial autocorrelation effects in hedonic models," Economics Bulletin, AccessEcon, vol. 32(2), pages 1474-1480.
    • Handle: RePEc:ebl:ecbull:eb-11-00777
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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I2-P141.pdf
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    References listed on IDEAS

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    1. William M. Bowen & Brian A. Mikelbank & Dean M. Prestegaard, 2001. "Theoretical and Empirical Considerations Regarding Space in Hedonic Housing Price Model Applications," Growth and Change, Wiley Blackwell, vol. 32(4), pages 466-490.
    2. J. Paul Elhorst & Annette S. Zeilstra, 2007. "Labour force participation rates at the regional and national levels of the European Union: An integrated analysis," Papers in Regional Science, Wiley Blackwell, vol. 86(4), pages 525-549, November.
    3. Smith, V Kerry & Huang, Ju-Chin, 1995. "Can Markets Value Air Quality? A Meta-analysis of Hedonic Property Value Models," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 209-227, February.
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    Cited by:

    1. Eduardo Pérez-Molina, 2022. "Exploring a multilevel approach with spatial effects to model housing price in San José, Costa Rica," Environment and Planning B, , vol. 49(3), pages 987-1004, March.
    2. Dennis Sánchez-Navarro, 2012. "Una propuesta metodológica para la definición de mercados geográficos relevantes," Estudios Económicos SIC 10492, Superintendencia de Industria y Comercio.
    3. Renaud Le Goix & Timothée Giraud & Robin Cura & Thibault Le Corre & Julien Migozzi, 2019. "Who sells to whom in the suburbs? Home price inflation and the dynamics of sellers and buyers in the metropolitan region of Paris, 1996-2012 [Qui vend à qui dans le périurbain ? L'inflation des prix résidentiels et la dynamique vendeurs-acquéreurs," Post-Print halshs-01968663, HAL.
    4. Fernando BRUNA & Isabel NEIRA & Marta PORTELA, 2019. "Horizontal And Vertical Contexts On Europeans’ Well-Being," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 19(2), pages 37-56.
    5. Nan Liu, 2021. "Market buoyancy, information transparency and pricing strategy in the Scottish housing market," Urban Studies, Urban Studies Journal Limited, vol. 58(16), pages 3388-3406, December.
    6. Renaud Le Goix & Timothée Giraud & Robin Cura & Thibault Le Corre & Julien Migozzi, 2019. "Who sells to whom in the suburbs? Home price inflation and the dynamics of sellers and buyers in the metropolitan region of Paris, 1996–2012," PLOS ONE, Public Library of Science, vol. 14(3), pages 1-36, March.

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    Keywords

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    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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