Additive Hedonic Regression Models with Spatial Scaling Factors: An Application for Rents in Vienna
We apply additive mixed regression models (AMM) to estimate hedonic price equations. Non-linear effects of continuous covariates as well as a smooth time trend are modeled non-parametrically through P-splines. Unobserved district-specific heterogeneity is modeled in two ways: First, by location specific intercepts with the postal code serving as a location variable. Second, in order to permit spatial variation in the nonlinear price gradients, we introduce multiplicative scaling factors for nonlinear covariates. This allows highly nonlinear implicit price functions to vary within a regularized framework, accounting for district-specific spatial heterogeneity. Using this model extension, we find substantial spatial variation in house price gradients, leading to a considerable improvement of model quality and predictive power.
|Date of creation:||Aug 2008|
|Contact details of provider:|| Postal: Universitätsstraße 15, A - 6020 Innsbruck|
Web page: http://www.uibk.ac.at/fakultaeten/volkswirtschaft_und_statistik/index.html.en
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John M. Clapp & Hyon-Jung Kim & Alan E. Gelfand, 2002. "Predicting Spatial Patterns of House Prices Using LPR and Bayesian Smoothing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 30(4), pages 505-532.
- Anglin, Paul M & Gencay, Ramazan, 1996. "Semiparametric Estimation of a Hedonic Price Function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 633-648, Nov.-Dec..
- Carlos Martins-Filho & Okmyung Bin, 2005.
"Estimation of hedonic price functions via additive nonparametric regression,"
Springer, vol. 30(1), pages 93-114, January.
- Okmyung Bin & Carlos Martins-Filho, "undated". "Estimation of Hedonic Price Functions via Additive Nonparametric Regression," Working Papers 0116, East Carolina University, Department of Economics.
- Ruppert,David & Wand,M. P. & Carroll,R. J., 2003. "Semiparametric Regression," Cambridge Books, Cambridge University Press, number 9780521780506, December.
- Follain, James R. & Jimenez, Emmanuel, 1985. "Estimating the demand for housing characteristics: A survey and critique," Regional Science and Urban Economics, Elsevier, vol. 15(1), pages 77-107, February.
- Ruppert,David & Wand,M. P. & Carroll,R. J., 2003. "Semiparametric Regression," Cambridge Books, Cambridge University Press, number 9780521785167, December.
- E. E. Kammann & M. P. Wand, 2003. "Geoadditive models," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 52(1), pages 1-18.
- Daniel J. Henderson & Christopher F. Parmeter & Subal C. Kumbhakar, 2007. "Nonparametric estimation of a hedonic price function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 695-699.
- Sheppard, Stephen, 1999.
"Hedonic analysis of housing markets,"
Handbook of Regional and Urban Economics,
in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 41, pages 1595-1635
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Basu, Sabyasachi & Thibodeau, Thomas G, 1998. "Analysis of Spatial Autocorrelation in House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 61-85, July.
- John M. Clapp, 2004. "A Semiparametric Method for Estimating Local House Price Indices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(1), pages 127-160, 03.
- Daniel P. McMillen, 2003. "Spatial Autocorrelation Or Model Misspecification?," International Regional Science Review, , vol. 26(2), pages 208-217, April.
- Clapp, John M, 2003. "A Semiparametric Method for Valuing Residential Locations: Application to Automated Valuation," The Journal of Real Estate Finance and Economics, Springer, vol. 27(3), pages 303-320, November.
- R. Kelley Pace, 1998. "Appraisal Using Generalized Additive Models," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 77-100.
When requesting a correction, please mention this item's handle: RePEc:inn:wpaper:2008-17. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janette Walde)
If references are entirely missing, you can add them using this form.