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Housing and Urban Location Decisions in Spain: An Econometric Analysis with Unobserved Heterogeneity

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  • Javier A. Barrios Garcia

    (Departmento de EconomiaAplicada, Facultad de CC.EE. y Empresariales, Universidad de La Laguna, Campus de Guajara, s/n. La Laguna, Sta Cruz de Tenerife 38071, Spain, jabarrio@ull.es)

  • Jose Enrique Rodriguez Hernandez

    (Departmento de EconomiaAplicada, Facultad de CC.EE. y Empresariales, Universidad de La Laguna, Campus de Guajara, s/n. La Laguna, Sta Cruz de Tenerife 38071, Spain, jerodri@ull.es)

Abstract

This paper examines the simultaneous individual choices in Spain as regards housing (tenure choice and demand) and urban location decisions, taking into account certain unobserved heterogeneity exhibited by individuals. A multinomial mixed logit model is proposed to portray household decisions considering four different options: homeownership according to the type of urbanisation of the neighbourhood (high-level urban property, medium/inferior-level urban property and rural property) and renting. Finally, housing demand is estimated, controlling for sample selection. The results confirm that both housing tenure and urban location, in addition to the unobserved heterogeneity of individuals in this context, could modify appreciably housing demand estimates for both owners and renters.

Suggested Citation

  • Javier A. Barrios Garcia & Jose Enrique Rodriguez Hernandez, 2007. "Housing and Urban Location Decisions in Spain: An Econometric Analysis with Unobserved Heterogeneity," Urban Studies, Urban Studies Journal Limited, vol. 44(9), pages 1657-1676, August.
    • Handle: RePEc:sae:urbstu:v:44:y:2007:i:9:p:1657-1676
    DOI: 10.1080/00420980701426624
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    References listed on IDEAS

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    3. Sigal Kaplan & Yoram Shiftan & Shlomo Bekhor, 2011. "A Semi-Compensatory Residential Choice Model With Flexible Error Structure," ERSA conference papers ersa10p65, European Regional Science Association.
    4. Yi-Wen Kuo & Cheng-Hsien Hsieh & Cheng-Min Feng & Wen-Ya Yeh, 2013. "Effects of price promotions on potential consumers of high-speed rail," Transportation Planning and Technology, Taylor & Francis Journals, vol. 36(8), pages 722-738, December.

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