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The Effect of Commuting Costs to Employment Centers on Urban Property Values: A Spatial Analysis in Bogot√°, Colombia

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  • Fernando Carriazo
  • Julian PeÔøΩaranda

Abstract

We study the effect that changes of commuting costs to intra urban employment centers may have on property prices in Bogot√°, Colombia. To explore the relationship between prices and communing costs, we use a difference in difference spatial model. Parametric and non-parametric estimations suggest a negative and significant impact of commuting costs on property values for dwellings far away from employment centers. The estimated price elasticity with respect to commuting costs for housing located in distant zones, indicates that a 1% increase in fuel price, reduces property values in 1.48%. Non-parametric Geographically Weighted Regression (GWR) showed to outperform traditional Spatial Autoregressive (SAR, SEM) models.

Suggested Citation

  • Fernando Carriazo & Julian PeÔøΩaranda, 2015. "The Effect of Commuting Costs to Employment Centers on Urban Property Values: A Spatial Analysis in Bogot√°, Colombia," Documentos CEDE 13133, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:013133
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    More about this item

    Keywords

    spatial econometrics; non-parametric methods; hedonic model; commuting costs;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • 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
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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