An alternative to the standard spatial econometric approaches in hedonic house price models

Research output: Contribution to journalJournal articleResearchpeer-review

  • Kathrine von Graevenitz
  • Toke Emil Panduro
Omitted, misspecified, or mismeasured spatially varying characteristics are a cause for concern in hedonic house price models. Spatial econometrics or spatial fixed effects have become popular ways of addressing these concerns. We discuss the limitations of standard spatial approaches to hedonic modeling and demonstrate the spatial generalized additive model as an alternative. Parameter estimates for several spatially varying regressors are shown to be sensitive to the scale of the fixed effects and bandwidth dimension used to control for omitted variables. This sensitivity reflects the uncertainty associated with the estimates when the appropriate spatial scale of the controls is unknown.
Original languageEnglish
JournalLand Economics
Volume91
Issue number2
Pages (from-to)386-409
Number of pages24
ISSN0023-7639
DOIs
Publication statusPublished - 2015

ID: 148102327