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Estimating a Price Surface for Vacant Land in an Urban Area

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  • JPeter F. Colwell
  • Henry J. Munneke

Abstract

TThis paper examines urban land prices within a non-parametric framework with specific interest in the land price gradient with respect to distance from the city center. The land price surface is estimated over a 900-square mile portion of the Chicago metropolitan area and is based on transaction level data of vacant land parcels. The price surface is estimated using piecewise parabolic multiple regression, proposed by Colwell 1998. Given the flexibility of this approach, a rather complex price surface is revealed. The estimated price surface provides some support for the standard urban economic doctrine of falling land prices with distance.

Suggested Citation

  • JPeter F. Colwell & Henry J. Munneke, 2003. "Estimating a Price Surface for Vacant Land in an Urban Area," Land Economics, University of Wisconsin Press, vol. 79(1), pages 15-28.
    • Handle: RePEc:uwp:landec:v:79:y:2003:i:1:p:15-28
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    References listed on IDEAS

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    1. Pace, R Kelley, 1993. "Nonparametric Methods with Applications to Hedonic Models," The Journal of Real Estate Finance and Economics, Springer, vol. 7(3), pages 185-204, November.
    2. McMillen, Daniel P., 1996. "One Hundred Fifty Years of Land Values in Chicago: A Nonparametric Approach," Journal of Urban Economics, Elsevier, vol. 40(1), pages 100-124, July.
    3. Colwell, Peter F, 1998. "A Primer on Piecewise Parabolic Multiple Regression Analysis via Estimations of Chicago CBD Land Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 87-97, July.
    4. Pace, R Kelley, 1995. "Parametric, Semiparametric, and Nonparametric Estimation of Characteristic Values within Mass Assessment and Hedonic Pricing Models," The Journal of Real Estate Finance and Economics, Springer, vol. 11(3), pages 195-217, November.
    5. Munneke, Henry J., 1996. "Redevelopment Decisions for Commercial and Industrial Properties," Journal of Urban Economics, Elsevier, vol. 39(2), pages 229-253, March.
    6. McDonald, John F. & Bowman, H. Woods, 1979. "Land value functions: A reevaluation," Journal of Urban Economics, Elsevier, vol. 6(1), pages 25-41, January.
    7. Hans R. Isakson & Mark D. Ecker, 2001. "An Analysis of the Influence of Location in the Market for Undeveloped Urban Fringe Land," Land Economics, University of Wisconsin Press, vol. 77(1), pages 30-41.
    8. Richard Meese & Nancy Wallace, 1991. "Nonparametric Estimation of Dynamic Hedonic Price Models and the Construction of Residential Housing Price Indices," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(3), pages 308-332, September.
    9. Thorsnes, Paul & McMillen, Daniel P, 1998. "Land Value and Parcel Size: A Semiparametric Analysis," The Journal of Real Estate Finance and Economics, Springer, vol. 17(3), pages 233-244, November.
    10. McDonald, John F., 1987. "The identification of urban employment subcenters," Journal of Urban Economics, Elsevier, vol. 21(2), pages 242-258, March.
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    Cited by:

    1. Gedal, Michael & Ellen, Ingrid Gould, 2018. "Valuing urban land: Comparing the use of teardown and vacant land sales," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 190-203.
    2. 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.

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    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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