Palgrave Handbook of Econometrics: Applied Econometrics

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26 Spatial Hedonic Models Luc Anselin and Nancy Lozano-Gracia Abstract In this chapter, we focus on some econometric aspects rel ...

1214 Spatial Hedonic Models 26.6 Empirical evidence: spatial heterogeneity 1239 26.6.1 Discrete heterogeneity: sub-markets 1239 ...

Luc Anselin and Nancy Lozano-Gracia 1215 Spatial patterns in the housing market are expected to arise from a combina- tion of sp ...

1216 Spatial Hedonic Models 26.2 Hedonic house price models In this section, we first outline the main properties of the hedonic ...

Luc Anselin and Nancy Lozano-Gracia 1217 example, for environmental characteristicqi, this would yield: ∂U/∂qi ∂U/∂x =∂Pi/∂qi. ( ...

1218 Spatial Hedonic Models for the characteristic. The general form of this expression is as in equation (26.4). This second st ...

Luc Anselin and Nancy Lozano-Gracia 1219 through the incorporation of spatial dependence and on the use of model spec- ification ...

1220 Spatial Hedonic Models 26.3.1 Spatial dependence 26.3.1.1 Spatial lag model The spatial lag specification is characterized ...

Luc Anselin and Nancy Lozano-Gracia 1221 where, under standard regularity conditions, the inverse(I−ρW)−^1 can be expressed as a ...

1222 Spatial Hedonic Models where= I, withIas the identity matrix. Typically,contains “nuisance” parameters that need to be e ...

Luc Anselin and Nancy Lozano-Gracia 1223 with the off-diagonal elements of!being!ij=e−φdij, andγas a non-negative scaling parame ...

1224 Spatial Hedonic Models units belong to, such as a census tract or block group. This rests on the assump- tion that the spat ...

Luc Anselin and Nancy Lozano-Gracia 1225 In the next iteration, the linear part of the model is estimated again using OLS, but n ...

1226 Spatial Hedonic Models include Paceet al. (1998), Paceet al. (2000), Gelfandet al. (2004), Sunet al. (2005) and Huanget al. ...

Luc Anselin and Nancy Lozano-Gracia 1227 A simpler spatio-temporal approach is introduced in Huanget al. (2006). Here, an expand ...

1228 Spatial Hedonic Models hedonic models, discrete spatial heterogeneity is taken into account in the form of separate models ...

Luc Anselin and Nancy Lozano-Gracia 1229 of additional explanatory variableszhi(again, including a constant term): βki= ∑ h zhiγ ...

1230 Spatial Hedonic Models whereWi(c)are the weights that depend on the location(c). The solution to the minimization problem i ...

Luc Anselin and Nancy Lozano-Gracia 1231 accounted for. In addition, it is not always obvious how the sample of observations rel ...