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The Matrix Exponential Spatial Specification Approach for Big Datasets: The Analysis of Istanbul Office Market

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  • Sinem Güler KANGALLI-UYAR

Abstract

Our aim is to develop a hedonic office rent model considering the spatial dependency in order to determine the factors affecting office rents. Based on a comparison between spatial lag, spatial error, and spatial Durbin models, the spatial lag model was selected as the most appropriate model explaining the relationship according to some criteria. Spatial models were estimated using the data on rent levels and property characteristics of 2348 business offices located in 28 different counties of Istanbul during the first quarter of 2018. According to the estimation results of the spatial lag model, the most effective independent variables are average vacancy rate, building type, and Bosporus view. Since the big dataset might cause some misleading estimations, the matrix exponential spatial specification model was estimated. It was observed that the estimated coefficients of both models are almost identical.

Suggested Citation

  • Sinem Güler KANGALLI-UYAR, 2020. "The Matrix Exponential Spatial Specification Approach for Big Datasets: The Analysis of Istanbul Office Market," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(43).
    • Handle: RePEc:sos:sosjrn:200104
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    References listed on IDEAS

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    More about this item

    Keywords

    Office Rents; Istanbul; Spatial Dependency; Matrix Exponential Spatial Specification; Big Data.;
    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
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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