IDEAS home Printed from https://ideas.repec.org/p/irs/cepswp/2018-07.html
   My bibliography  Save this paper

A residential land price index for Luxembourg: Dealing with the spatial dimension

Author

Listed:
  • GLUMAC Brano
  • HERRERA-GOMEZ Marcos
  • LICHERON Julien

Abstract

Urban development projects have many effects on society, such as improving mobility, health, education, and sustainability. For policy-relevant measures, it is important that policymakers are able to foresee how quality improvements influence the price of land. Therefore, our objective is to collect a set of variables able to account for the effects of a multitude of land quality improvements. In addition, surrounding plots and the natural and built environment might also influence urban land prices. However, most house price and land price indices do not control for any potentially related spatial effects. The urban land price index detailed here is based on land transaction prices for Luxembourg between 2010 and 2014 recorded in notarial deeds and cadastral data, together with geo-spatial characteristics. The proposed index includes many aspects in an initial hedonic model specification, the index also operates on a spatial model.

Suggested Citation

  • GLUMAC Brano & HERRERA-GOMEZ Marcos & LICHERON Julien, 2018. "A residential land price index for Luxembourg: Dealing with the spatial dimension," LISER Working Paper Series 2018-07, LISER.
  • Handle: RePEc:irs:cepswp:2018-07
    as

    Download full text from publisher

    File URL: https://www.liser.lu/publi_viewer.cfm?tmp=4198
    Download Restriction: no

    References listed on IDEAS

    as
    1. Luc Anselin & Nancy Lozano-Gracia, 2008. "Errors in variables and spatial effects in hedonic house price models of ambient air quality," Empirical Economics, Springer, vol. 34(1), pages 5-34, February.
    2. B. Wade Brorsen & Damona Doye & Kalyn B. Neal, 2015. "Agricultural Land and the Small Parcel Size Premium Puzzle," Land Economics, University of Wisconsin Press, vol. 91(3), pages 572-585.
    3. Corinne Mulley, 2014. "Accessibility and Residential Land Value Uplift: Identifying Spatial Variations in the Accessibility Impacts of a Bus Transitway," Urban Studies, Urban Studies Journal Limited, vol. 51(8), pages 1707-1724, June.
    4. David E. Andersson, 2000. "Hypothesis testing in hedonic price estimation - On the selection of independent variables," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(2), pages 293-304.
    5. W. Erwin Diewert & Jan de Haan & Rens Hendriks, 2015. "Hedonic Regressions and the Decomposition of a House Price Index into Land and Structure Components," Econometric Reviews, Taylor & Francis Journals, vol. 34(1-2), pages 106-126, February.
    6. John M. Clapp, 1990. "A Methodology for Constructing Vacant Land Price Indices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 18(3), pages 274-293.
    7. Ray M. Northam, 1971. "Vacant Urban Land in the American City," Land Economics, University of Wisconsin Press, vol. 47(4), pages 345-355.
    8. Nichols, Joseph B. & Oliner, Stephen D. & Mulhall, Michael R., 2013. "Swings in commercial and residential land prices in the United States," Journal of Urban Economics, Elsevier, vol. 73(1), pages 57-76.
    9. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February.
    10. Jamie Spinney & Pavlos Kanaroglou & Darren Scott, 2011. "Exploring Spatial Dynamics with Land Price Indexes," Urban Studies, Urban Studies Journal Limited, vol. 48(4), pages 719-735, March.
    11. Peter F. Colwell & Gene Dilmore, 1999. "Who Was First? An Examination of an Early Hedonic Study," Land Economics, University of Wisconsin Press, vol. 75(4), pages 620-626.
    12. Davis, Morris A. & Heathcote, Jonathan, 2007. "The price and quantity of residential land in the United States," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2595-2620, November.
    13. Des Rosier, F. & Theriault, M., 1999. "House Prices and Spatial Dependence : Towards an Integrated Procedure to Model Neighborhood," Papers 99-002, Laval - Faculte des sciences de administration.
    14. Liv Osland, 2010. "Spatial variation in job accessibility and gender: an intraregional analysis using hedonic house-price estimation," Environment and Planning A, Pion Ltd, London, vol. 42(9), pages 2220-2237, September.
    15. Nils Soguel & Alexandre Tangerini & Jacques Pictet, 2007. "How to Measure Scope Variables when no Metrics Exist : Application to Landscape Quality Measurement and Hedonic Price Evaluation," Revue d'├ęconomie politique, Dalloz, vol. 117(5), pages 827-841.
    16. Nick French, 2001. "Decision theory and real estate investment: an analysis of the decision-making processes of real estate investment fund managers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(7), pages 399-410.
    17. 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..
    18. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    19. Eurostat, 2013. "Handbook on Residential Property Prices Indices," World Bank Publications, The World Bank, number 17280.
    20. Liv Osland, 2010. "Spatial Variation in Job Accessibility and Gender: An Intraregional Analysis using Hedonic House-Price Estimation," Environment and Planning A, , vol. 42(9), pages 2220-2237, September.
    21. J. Elhorst, 2010. "Applied Spatial Econometrics: Raising the Bar," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(1), pages 9-28.
    22. Raphael W. Bostic & Stanley D. Longhofer & Christian L. Redfearn, 2007. "Land Leverage: Decomposing Home Price Dynamics," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 35(2), pages 183-208, June.
    23. Des Rosiers, F. & Theriault, M., 1999. "House Prices and Spatial Dependence: Towards an Integrated Procedure to Model Neighborhood Dynamics," Papers 1999-2, Laval - Faculte des sciences de administration.
    24. Greg Costello, 2014. "Land price dynamics in a large Australian urban housing market," International Journal of Housing Markets and Analysis, Emerald Group Publishing, vol. 7(1), pages 42-60, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    land value; hedonic regression; spatial Durbin error model; Luxembourg;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:irs:cepswp:2018-07. 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: (Library and Documentation). General contact details of provider: http://edirc.repec.org/data/cepsslu.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.