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A Spatial Quantile Regression Hedonic Model of Agricultural Land Prices

Listed author(s):
  • Philip Kostov

Abstract Land price studies typically employ hedonic analysis to identify the impact of land characteristics on price. Owing to the spatial fixity of land, however, the question of possible spatial dependence in agricultural land prices arises. The presence of spatial dependence in agricultural land prices can have serious consequences for the hedonic model analysis. Ignoring spatial autocorrelation can lead to biased estimates in land price hedonic models. We propose using a flexible quantile regression-based estimation of the spatial lag hedonic model allowing for varying effects of the characteristics and, more importantly, varying degrees of spatial autocorrelation. In applying this approach to a sample of agricultural land sales in Northern Ireland we find that the market effectively consists of two relatively separate segments. The larger of these two segments conforms to the conventional hedonic model with no spatial lag dependence, while the smaller, much thinner market segment exhibits considerable spatial lag dependence. Un modèle hédonique à régression quantile spatiale des prix des terrains agricoles Résumé Les études sur le prix des terrains font généralement usage d'une analyse hédonique pour identifier l'impact des caractéristiques des terrains sur le prix. Toutefois, du fait de la fixité spatiale des terrains, la question d'une éventuelle dépendance spatiale sur la valeur des terrains agricoles se pose. L'existence d'une dépendance spatiale dans le prix des terrains agricoles peut avoir des conséquences importantes sur l'analyse du modèle hédonique. En ignorant cette corrélation sérielle, on s'expose au risque d'évaluations biaisées des modèles hédoniques du prix des terrains. Nous proposons l'emploi d'une estimation à base de régression flexible du modèle hédonique à décalage spatial, tenant compte de différents effets des caractéristiques, et surtout de différents degrés de corrélations sérielles spatiales. En appliquant ce principe à un échantillon de ventes de terrains agricoles en Irlande du Nord, nous découvrons que le marché se compose de deux segments relativement distincts. Le plus important de ces deux segments est conforme au modèle hédonique traditionnel, sans dépendance du décalage spatial, tandis que le deuxième segment du marché, plus petit et beaucoup plus étroit, présente une dépendance considérable du décalage spatial. Un modelo hedónico de regresión cuantil espacial de los precios del terreno agrícola Resumen Típicamente, los estudios del precio de la tierra emplean un análisis hedónico para identificar el impacto de las características de la tierra sobre el precio. No obstante, debido a la fijeza espacial de la tierra, surge la cuestión de una posible dependencia espacial en los precios del terreno agrícola. La presencia de dependencia espacial en los precios del terreno agrícola puede tener consecuencias graves para el modelo de análisis hedónico. Ignorar la autocorrelación espacial puede conducir a estimados parciales en los modelos hedónicos del precio de la tierra. Proponemos el uso de una valoración basada en una regresión cuantil flexible del modelo hedónico del lapso espacial que tenga en cuenta los diversos efectos de las características y, particularmente, los diversos grados de autocorrelación espacial. Al aplicar este planteamiento a una muestra de ventas de terreno agrícola en Irlanda del Norte, descubrimos que el mercado consiste efectivamente de dos segmento relativamente separados. El más grande de estos dos segmentos se ajusta al modelo hedónico convencional sin dependencia del lapso espacial, mientras que el segmento más pequeño, y mucho más fino, muestra una dependencia considerable del lapso espacial.

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Article provided by Taylor & Francis Journals in its journal Spatial Economic Analysis.

Volume (Year): 4 (2009)
Issue (Month): 1 ()
Pages: 53-72

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Handle: RePEc:taf:specan:v:4:y:2009:i:1:p:53-72
DOI: 10.1080/17421770802625957
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