Spatial heterogeneity, spatial dependence and spatial scale constitute key features of spatial analysis of housing markets. However, the common practice of modelling spatial dependence as being generated by spatial interactions through a known spatial weights matrix is often not satisfactory. While existing estimators of spatial weights matrices are based on repeat sales or panel data, this paper takes this approach to a cross-section setting. Specifically, based on an a priori definition of housing submarkets and the assumption of a multifactor model, we develop maximum likelihood methodology to estimate hedonic models that facilitate understanding of both spatial heterogeneity and spatial interactions. The methodology, based on statistical orthogonal factor analysis, is applied to the urban housing market of Aveiro, Portugal at two different spatial scales.
|Place of Publication||Dundee|
|Publisher||University of Dundee|
|Publication status||Published - 2011|
|Name||Dundee Discussion Papers in Economics|
- spatial econometrics
- spatial heterogeneity
- spatial dependence
- spatial scale
- statistical factor analysis
- spatial weights matrix
- hedonic pricing
Bhattacharjee, A., Anselmo de Castro, E., & Marques, J. L. (2011). Spatial interactions in hedonic pricing models: The urban housing market of Aveiro, Portugal. (Dundee Discussion Papers in Economics). University of Dundee.