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Keeping up with the Joneses: Neighborhood effects in housing renovation

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  • Helms, Andrew C.

Abstract

Despite widespread recognition that housing renovation is influenced by “neighborhood effects”, virtually all empirical studies have failed to identify a positive feedback effect between renovation activity and neighborhood quality. By explicitly modeling the spatial interdependence of households' renovation decisions and analyzing a detailed block-level data set, this study finds strong empirical evidence that endogenous neighborhood effects exist as expected. Moreover, by considering four different parameterizations of a “neighborhood set” and comparing the results of these spatial econometric models with a standard OLS estimation, this paper provides insight into some common methodological issues encountered when modeling neighborhood effects.

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  • Helms, Andrew C., 2012. "Keeping up with the Joneses: Neighborhood effects in housing renovation," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 303-313.
    • Handle: RePEc:eee:regeco:v:42:y:2012:i:1:p:303-313
    DOI: 10.1016/j.regsciurbeco.2011.07.005
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    Cited by:

    1. Jenny Schuetz, 2020. "Teardowns, popups, and renovations: How does housing supply change?," Journal of Regional Science, Wiley Blackwell, vol. 60(3), pages 459-480, June.
    2. Egner, Lars Even & Klöckner, Christian A., 2021. "Temporal spillover of private housing energy retrofitting: Distribution of home energy retrofits and implications for subsidy policies," Energy Policy, Elsevier, vol. 157(C).
    3. Meng Yuan & Hongjuan Wu, 2024. "Positive or Negative: The Heterogeneities in the Effects of Urban Regeneration on Surrounding Economic Vitality—From the Perspective of Housing Price," Land, MDPI, vol. 13(5), pages 1-27, May.
    4. Suzanne Lanyi Charles, 2014. "The spatio-temporal pattern of housing redevelopment in suburban Chicago, 2000–2010," Urban Studies, Urban Studies Journal Limited, vol. 51(12), pages 2646-2664, September.
    5. Geoffrey K. Turnbull & Arno J. van der Vlist, 2024. "Foreclosures and housing prices: does neighborhood configuration matter?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(2), pages 407-433, February.
    6. Xinjun Dai & Zeling Li & Lindong Ma & Jing Jin, 2022. "The Spatio-Temporal Pattern and Spatial Effect of Installation of Lifts in Old Residential Buildings: Evidence from Hangzhou in China," Land, MDPI, vol. 11(9), pages 1-16, September.
    7. Savari, Moslem & Ghezi, Mohammadamin & Molavi, Homa, 2025. "Social capital and behavioral response to water scarcity: Sustainable agriculture policies pathways for adopting dry direct-seeded rice," Agricultural Water Management, Elsevier, vol. 313(C).
    8. Munneke, Henry J. & Womack, Kiplan S., 2015. "Neighborhood renewal: The decision to renovate or tear down," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 99-115.
    9. Anupam Nanda & Jia-Huey Yeh, 2016. "Reflected Glory Versus Repulsive Envy: How Do the Smiths Feel About the House of the Joneses?," Asian Economic Journal, East Asian Economic Association, vol. 30(3), pages 317-341, September.
    10. Simlai, Prodosh, 2014. "Estimation of variance of housing prices using spatial conditional heteroskedasticity (SARCH) model with an application to Boston housing price data," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 17-30.
    11. Jin, Fei & Lee, Lung-fei, 2012. "Approximated likelihood and root estimators for spatial interaction in spatial autoregressive models," Regional Science and Urban Economics, Elsevier, vol. 42(3), pages 446-458.

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    More about this item

    Keywords

    Neighborhood effects; Housing renovation; Spatial econometrics;
    All these keywords.

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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