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Spatial Competition and Transport Infrastructure: The Case of Moscow Office Rental Market

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  • Tatiana Mikhailova

Abstract

This paper studies the geography of competition on Moscow commercial real estate market. We estimate the elasticity of office rental price to the prices of competing objects as a function of the geographical distance. We found that office real estate market in Moscow, although saturated, is surprisingly local. The evidence of price competition exists primarily at a walking distance, and dies down quickly at a distances beyond one kilometer. However, if competing objects are connected by a subway line, the geographical radius of competition extends to up to three kilometers. Thus, in the case of Moscow real estate transportation infrastructure works to integrate local markets and promote competition, although the magnitude of these effects are modest.

Suggested Citation

  • Tatiana Mikhailova, 2015. "Spatial Competition and Transport Infrastructure: The Case of Moscow Office Rental Market," ERSA conference papers ersa15p1011, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa15p1011
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    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa15/e150825aFinal01011.pdf
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    References listed on IDEAS

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    1. Shinichiro Iwata & Kazuto Sumita & Mieko Fujisawa, 2019. "Price competition in the spatial real estate market: allies or rivals?," Spatial Economic Analysis, Taylor & Francis Journals, vol. 14(2), pages 174-195, April.
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    4. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
    5. 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..
    6. Bertaud, Alain & Renaud, Bertrand, 1997. "Socialist Cities without Land Markets," Journal of Urban Economics, Elsevier, vol. 41(1), pages 137-151, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    spatial competition; real estate; transport;
    All these keywords.

    JEL classification:

    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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