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Is it worth identifying service employment (sub)centres when modelling apartment prices?

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  • Marko Kryvobokov

    (LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique)

Abstract

The use of the attributes of the central business district and several subcentres instead of the characteristics of all the land parcels or zones can be seen as a higher level of analysis in real estate valuation. However, old technological limitations on considering smaller territorial units are being successfully overcome. The question is whether or not we still need generalisation, i.e. to identify urban centres when modelling real estate prices, or whether it is preferable to operate at a lower spatial level. The application of the traditional approach of identifying centres is compared with an 'objective' centrality index and a 'subjective' accessibility index calculated for each zone. The purpose is to find out which of the three concepts best fits a regression model of apartment prices and provides the best prediction. Both global and geographically weighted ordinary least squares regressions are used as well as spatial lag and spatial error models. We conclude that if a model is spatially weighted or the spatial effects are controlled, it is not that important which of the concepts is applied. Nevertheless, in most cases the highest predictive capacity is obtained with duocentric models.

Suggested Citation

  • Marko Kryvobokov, 2010. "Is it worth identifying service employment (sub)centres when modelling apartment prices?," Post-Print halshs-00577899, HAL.
    • Handle: RePEc:hal:journl:halshs-00577899
    DOI: 10.1080/09599916.2010.517852
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00577899
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    References listed on IDEAS

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    1. Fujita, Masahisa & Thisse, Jacques-Francois & Zenou, Yves, 1997. "On the Endogeneous Formation of Secondary Employment Centers in a City," Journal of Urban Economics, Elsevier, vol. 41(3), pages 337-357, May.
    2. Thomas De Graaff & Raymond J.C.M. Florax & Peter Nijkamp & Aura Reggiani, 2001. "A General Misspecification Test for Spatial Regression Models: Dependence, Heterogeneity, and Nonlinearity," Journal of Regional Science, Wiley Blackwell, vol. 41(2), pages 255-276, May.
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    Cited by:

    1. Marko Kryvobokov & Aurélie Mercier & Alain Bonnafous & Dominique Bouf, 2013. "Simulating housing prices with UrbanSim: predictive capacity and sensitivity analysis," Letters in Spatial and Resource Sciences, Springer, vol. 6(1), pages 31-44, March.
    2. Marko Kryvobokov & Louafi Bouzouina, 2014. "Willingness to pay for accessibility under the conditions of residential segregation," Post-Print halshs-01082820, HAL.

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