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Exploring the Ripple Effect and Spatial Volatility in House Prices in England and Wales: Regressing Interaction Domain Cross-Correlations against Reactive Statistics

Author

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  • Crispin Cooper

    (Sustainable Places Research Institute, Cardiff University, 33 Park Place, Cardiff CF10 3BA, Wales)

  • Scott Orford
  • Chris Webster
  • Christopher B Jones

    (School of Computer Science and Informatics, Cardiff University, 5 The Parade, Roath, Cardiff CF24 3AA, Wales)

Abstract

In this study we conduct an exploratory spatiotemporal analysis of recent UK housing-market data 2000–06, fine grained both in space and in time. We present firstly the exploratory technique itself, and secondly an overview of patterns found in the dataset. A broadly scoped metamodel is created which points towards fruitful avenues for further investigation and understanding of the driving forces behind price propagation in the housing market. At the core of this model is an 8850 × 8850 cross-correlation matrix representing price linkage between different areas, which is analyzed by a custom regression engine. Hence this is the first study to unify both local and regional house-price modelling, and the first to look for a quantitative explanation of the structure of any house-price interaction matrix on a large scale. Findings corroborate existing research on the ripple effect and spatial volatility, and point towards mechanisms through which these might arise, as a combination of local interaction and market segmentation broken by lifecycle migration patterns.

Suggested Citation

  • Crispin Cooper & Scott Orford & Chris Webster & Christopher B Jones, 2013. "Exploring the Ripple Effect and Spatial Volatility in House Prices in England and Wales: Regressing Interaction Domain Cross-Correlations against Reactive Statistics," Environment and Planning B, , vol. 40(5), pages 763-782, October.
    • Handle: RePEc:sae:envirb:v:40:y:2013:i:5:p:763-782
    DOI: 10.1068/b37062
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    References listed on IDEAS

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    1. Song Shi & Martin Young & Bob Hargreaves, 2009. "The ripple effect of local house price movements in New Zealand," Journal of Property Research, Taylor & Francis Journals, vol. 26(1), pages 1-24, April.
    2. McDonald, Ronald & Taylor, Mark P, 1993. "Regional House Prices in Britain: Long-Run Relationships and Short-Run Dynamics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 40(1), pages 43-55, February.
    3. David Gray, 2012. "District House Price Movements in England and Wales 1997–2007: An Exploratory Spatial Data Analysis Approach," Urban Studies, Urban Studies Journal Limited, vol. 49(7), pages 1411-1434, May.
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    1. Renaud Le Goix & Timothée Giraud & Robin Cura & Thibault Le Corre & Julien Migozzi, 2019. "Who sells to whom in the suburbs? Home price inflation and the dynamics of sellers and buyers in the metropolitan region of Paris, 1996-2012 [Qui vend à qui dans le périurbain ? L'inflation des pri," Post-Print halshs-01968663, HAL.

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