Price competition in the spatial real estate market: Allies or rivals?
This paper examines real estate pricing featuring the price response curve, both theoretically and empirically. The Bertrand model with differentiated products suggests that the price response of real estate may differ when properties in the vicinity are priced by an affiliated firm or one's own firm. This is because the firm can maintain the collusive state if real estate prices in the neighborhood are priced by allies, whereas it loses it if prices are priced by rivals. To examine this prediction, a spatial autoregressive model with autoregressive and heteroskedastic disturbances, including a share of allies in the vicinity, is estimated using data on the residential condominium market in central Tokyo. Empirical results provide support for the model prediction.
|Date of creation:||Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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.:
- Harry H. Kelejian & Ingmar R. Prucha, 1997.
"A Generalized Spatial Two Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances,"
Electronic Working Papers
97-002, University of Maryland, Department of Economics, revised Aug 1997.
- Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
- Can, Ayse & Megbolugbe, Isaac, 1997. "Spatial Dependence and House Price Index Construction," The Journal of Real Estate Finance and Economics, Springer, vol. 14(1-2), pages 203-22, Jan.-Marc.
- Kim, Chong Won & Phipps, Tim T. & Anselin, Luc, 1998.
"Measuring The Benefits Of Air Quality Improvement: A Spatial Hedonic Approach,"
1998 Annual meeting, August 2-5, Salt Lake City, UT
20959, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Won Kim, Chong & Phipps, Tim T. & Anselin, Luc, 2003. "Measuring the benefits of air quality improvement: a spatial hedonic approach," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 24-39, January.
- Mobley, Lee R., 2003. "Estimating hospital market pricing: an equilibrium approach using spatial econometrics," Regional Science and Urban Economics, Elsevier, vol. 33(4), pages 489-516, July.
- Im, Kyung So, 2000. "Robustifying Glejser test of heteroskedasticity," Journal of Econometrics, Elsevier, vol. 97(1), pages 179-188, July.
- Harry H. Kelejian & Ingmar R. Prucha, 2008.
"Specification and Estimation of Spatial Autoregressive Models with Autoregressive and Heteroskedastic Disturbances,"
CESifo Working Paper Series
2448, CESifo Group Munich.
- Kelejian, Harry H. & Prucha, Ingmar R., 2010. "Specification and estimation of spatial autoregressive models with autoregressive and heteroskedastic disturbances," Journal of Econometrics, Elsevier, vol. 157(1), pages 53-67, July.
- Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
- Gérard, Marcel & Jayet, Hubert & Paty, Sonia, 2010.
"Tax interactions among Belgian municipalities: Do interregional differences matter?,"
Regional Science and Urban Economics,
Elsevier, vol. 40(5), pages 336-342, September.
- Marcel Gérard & Hubert Jayet & Sonia Paty, 2010. "Tax interactions among Belgian municipalities: Do interregional differences matter?," Post-Print halshs-00597389, HAL.
- DANIEL P. McMILLEN & LARRY D. SINGELL & GLEN R. WADDELL, 2007. "Spatial Competition And The Price Of College," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 817-833, October.
- Beck, Jason & Scott, Frank & Yelowitz, Aaron, 2010. "Competition and market structure in local real estate markets," MPRA Paper 27531, University Library of Munich, Germany.
- Göran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
- Mobley, Lee R & Frech, Ted E & Anselin, Luc, 2008.
"Spatial Interaction, Spatial Multipliers, and Hospital Competition,"
University of California at Santa Barbara, Economics Working Paper Series
qt4m8862hd, Department of Economics, UC Santa Barbara.
- Lee Mobley & H. E. Frech & Luc Anselin, 2009. "Spatial Interaction, Spatial Multipliers and Hospital Competition," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 16(1), pages 1-17.
- Urzua, Carlos M., 1996. "On the correct use of omnibus tests for normality," Economics Letters, Elsevier, vol. 53(3), pages 247-251, December.
- Chen, Yong & Clapp, John M. & Tirtiroglu, Dogan, 2011. "Hedonic estimation of housing demand elasticity with a markup over marginal costs," Journal of Housing Economics, Elsevier, vol. 20(4), pages 233-248.
- Raymond J.G.M. Florax & Hendrik Folmer & Sergio J. Rey, 2002.
"Specification Searches in Spatial Econometrics: The Relevance of Hendry's Methodology,"
- Florax, Raymond J. G. M. & Folmer, Hendrik & Rey, Sergio J., 2003. "Specification searches in spatial econometrics: the relevance of Hendry's methodology," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 557-579, September.
- Jan K. Brueckner & Luz A. Saavedra, 2000.
"Do Local Governments Engage in Strategic Property-Tax Competition?,"
Econometric Society World Congress 2000 Contributed Papers
0357, Econometric Society.
- Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association, vol. 54(n. 2), pages 203-30, June.
- Steven Bourassa & Eva Cantoni & Martin Hoesli, 2007. "Spatial Dependence, Housing Submarkets, and House Price Prediction," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 143-160, August.
- Goodman, Allen C. & Thibodeau, Thomas G., 1998. "Housing Market Segmentation," Journal of Housing Economics, Elsevier, vol. 7(2), pages 121-143, June.
- Dieter Pennerstorfer, 2009. "Spatial price competition in retail gasoline markets: evidence from Austria," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(1), pages 133-158, March.
- J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar Publishing.
- Bresnahan, Timothy F, 1987. "Competition and Collusion in the American Automobile Industry: The 1955 Price War," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 457-82, June.
- Can, Ayse, 1992. "Specification and estimation of hedonic housing price models," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 453-474, September.
- Machado, Jose A. F. & Silva, J. M. C. Santos, 2000. "Glejser's test revisited," Journal of Econometrics, Elsevier, vol. 97(1), pages 189-202, July.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:37438. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.