scholarly journals A REVIEW OF SPATIAL ECONOMETRICS IN EXPLICIT LOCATION MODELLING OF COMMERCIAL PROPERTY MARKET

2021 ◽  
Vol 19 (17) ◽  
Author(s):  
Hamza Usman ◽  
Mohd Lizam ◽  
Burhaida Burhan
Keyword(s):  
Spatial Econometrics ◽  
Spatial Data ◽  
Hedonic Pricing ◽  
Spatial Effects ◽  
Property Market ◽  
Real Property ◽  
Hedonic Pricing Model ◽  
Commercial Property ◽  
Market Location ◽  
Limited Application

‘Location, location, location’ is a real property parlance mostly used to describe the influence of location in the property market. Location is mainly considered as the most significant influencer of commercial property prices. Location is modelled traditionally using hedonic pricing model by either proxy location dummies or distances relative to other neighbourhood features. This was shown to be inadequate due to spatial autocorrelation and heterogeneity inherent in spatial data, which jeopardises the estimates' consistency. Consequently, spatial econometrics is used to explicitly model location into property pricing by controlling spatial effects of autocorrelation and heterogeneity. Housing studies dominate the use of this approach with limited application in the commercial property market. This paper reviewed spatial econometrics and found that the commercial property market exhibits significant spatial dependence and heterogeneity. Accounting for such effects improves model accuracy significantly. It, therefore, recommends increase use of spatial econometrics in commercial property market modelling.

scholarly journals Modelling the drivers of the UK multi-let industrial property market: an exploratory study

2020 ◽  
Vol 38 (4) ◽  
pp. 585-596
Author(s):  
David Higgins ◽  
Tsvetomira Vincent ◽  
Peter Wood
Keyword(s):  
Real Estate ◽  
Hedonic Pricing ◽  
Valuable Insight ◽  
Pricing Model ◽  
Property Market ◽  
Industrial Property ◽  
Content Type ◽  
Hedonic Pricing Model ◽  
Significant Difference ◽  
Asset Class

PurposeMulti-let industrial (MLI) estates are an emerging £15 billion UK real estate asset class that can offer attractive returns, a diversified income base, constrained supply and extensive management opportunities to add value within an operational platform. This investment appeal is supported by the evolving MLI occupier market with the growth of small to medium enterprises (SME) requiring modern urban business space driven in part by technology advances offering new streams of supply chain connectivity between businesses and potential clients at a local level.Design/methodology/approachTo understand more about MLI properties, this study utilises a hedonic pricing model to quantify property values as a function of defined variables. The dataset used for this research is a sample portfolio of 26 multi-let industrial properties. The dataset was analysed alongside eleven physical, financial and locational factors. Interestingly, the hedonic pricing model results showed that only four characteristics are value-affecting across the selected properties: namely (1) Granularity of the property income, (2) Distance from the nearest motorway, (3) Distance to the nearest town centre and (4) Gross internal floor area. A chi–test confirmed that there was no significant difference between the modelled values and the supplied property valuations.FindingsThis preliminary study offers valuable insight into MLI property market drivers and could easily form a simple decision-making tool to examine potential MLI opportunities in this developing real estate asset class.Originality/valueIn detailing these key MLI property features, current research is limited and focused primarily on market commentary. New knowledge on the MLI property market can provide a platform creating interesting opportunities for fund managers with an intensive management engagement strategy.

scholarly journals Spatial Analysis of Urban Water Use Management in the Northern Border Region of Mexico

2020 ◽  
Vol 15 (11) ◽  
pp. 126
Author(s):  
Gregorio Castro-Rosales ◽  
Ramiro Esqueda-Walle
Keyword(s):  
Spatial Econometrics ◽  
Spatial Data ◽  
Ordinary Least Squares ◽  
Border Region ◽  
Spatial Data Analysis ◽  
Water Price ◽  
Urban Water ◽  
Spatial Effects ◽  
Water Index ◽  
Northern Border

This paper estimates water price elasticity and examines spatial patterns of urban water management variables in 70 localities of more than 2 500 inhabitants of the six northern border Mexican states. By using ordinary least squares, spatial econometrics, Lagrange Multipliers, and exploratory spatial data analysis techniques, four variables were analyzed: water price (P), a Non-revenue water index (NRWI), total urban water connections, and water billed volume (BV). In accordance with the literature, we found that water demand is price sensitive but inelastic. Then price as an instrument for controlling water consumption does not offer an efficient alternative for reducing it, as water price increases would have to rise very high to reflect changes in consumption habits. Instead, it could be just a revenue-raising tool. Our findings also confirm a significant spatial autocorrelation in P and the NRWI. More interestingly, we found robust spatial effects on BV. This result implies that the performance of urban water utilities is determined by its counterparts' performance in the region. Given the results and characteristics of water resources in the region, we argue that management policies must consider a regional approach to be effective.

scholarly journals Hedonic Pricing Model for Real Property Valuation via GIS - A Review

2019 ◽  
Vol 29 (3) ◽  
pp. 34-47
Author(s):  
Zubeida Aladwan ◽  
Mohd Sanusi S. Ahamad
Keyword(s):  
Spatial Data ◽  
Hedonic Pricing ◽  
Hedonic Model ◽  
Pricing Model ◽  
Real Property ◽  
Pricing Models ◽  
Model Studies ◽  
Property Valuation ◽  
Gis Applications ◽  
Future Prediction

Abstract Hedonic pricing models in real property valuation have been frequently applied in many research studies and projects since it was introduced by Rosen in 1974. The development of Geographic Information Systems (GIS) in the recent decades has gradually supports the usage of hedonic model in the spatial data pricing model studies. Beside the basic advantages of GIS to position properties in terms of their geographic coordinates, it has the capabilities of dealing with reasonable amount of data, and wide choices of analysis that make it powerful tool to facilitate the building and implementation of the hedonic models within its framework. Many studies have employed GIS in real property valuation in their present work and for the future prediction. This paper reviews the works of literature on the GIS applications in the real property valuation employing the hedonic pricing models.

scholarly journals Evaluating the Impact of Floods on Housing Price Using a Spatial Matching Difference-In-Differences (SM-DID) Approach

2021 ◽  
Vol 13 (2) ◽  
pp. 804
Author(s):  
Jean Dubé ◽  
Maha AbdelHalim ◽  
Nicolas Devaux
Keyword(s):  
Housing Price ◽  
Hedonic Pricing ◽  
Environmental Amenities ◽  
Sale Price ◽  
Difference In Differences ◽  
Hedonic Pricing Model ◽  
The Difference ◽  
And Control ◽  
The Impact ◽  
The City

Many applications have relied on the hedonic pricing model (HPM) to measure the willingness-to-pay (WTP) for urban externalities and natural disasters. The classic HPM regresses housing price on a complete list of attributes/characteristics that include spatial or environmental amenities (or disamenities), such as floods, to retrieve the gradients of the market (marginal) WTP for such externalities. The aim of this paper is to propose an innovative methodological framework that extends the causal relations based on a spatial matching difference-in-differences (SM-DID) estimator, and which attempts to calculate the difference between sale price for similar goods within “treated” and “control” groups. To demonstrate the potential of the proposed spatial matching method, the researchers present an empirical investigation based on the case of a flood event recorded in the city of Laval (Québec, Canada) in 1998, using information on transactions occurring between 1995 and 2001. The research results show that the impact of flooding brings a negative premium on the housing price of about 20,000$ Canadian (CAN).

Brokerage Intermediation in the Commercial Property Market

2009 ◽  
Vol 31 (4) ◽  
pp. 397-420 ◽  
Author(s):  
William Hardin III ◽  
Ken Johnson ◽  
Zhonghua Wu
Keyword(s):  
Property Market ◽  
Commercial Property

scholarly journals U.S. Consumer Demand for Plant-Based Milk Alternative Beverages: Hedonic Metric Augmented Barten’s Synthetic Model

Foods ◽  
2021 ◽  
Vol 10 (2) ◽  
pp. 265
Author(s):  
Tingyi Yang ◽  
Senarath Dharmasena
Keyword(s):  
Hedonic Pricing ◽  
Demand System ◽  
Soy Milk ◽  
Purchasing Behavior ◽  
New Approach ◽  
Hedonic Pricing Model ◽  
Inelastic Demand ◽  
Demand System Estimation ◽  
Nutritional Data ◽  
Conventional Milk

Consumers in the U.S. increasingly prefer plant-based milk alternative beverages (abbreviated “plant milk”) to conventional milk. This study is motivated by the need to take into consideration varied nutritional and qualitative attributes in plant milk to examine consumers’ purchasing behavior and estimate demand elasticities which are achieved by a new approach combing hedonic pricing model with Barten’s synthetic demand system. The method of estimation is enlightened from the common practice of companies differentiating their products in multidimensions in terms of attributes. A research dataset was uniquely created by associating the products’ purchase data from Nielsen Homescan dataset with exclusive first-hand nutritional data. Estimations began with creating a multidimensional hedonic attribute space based on the qualitative information of different types of plant milk and conventional milk available to consumers and then calculating the hedonic distances by Euclidean distance measurement to reparametrize Barten’s synthetic demand system. Estimation results showed that the highest own-price elasticity pertained to soy milk which was −0.25. Three plant milk types had inelastic demand. Soy milk exerted substituting effects on all types of conventional milk products and vice versa. Soy milk, rice milk and almond milk entertained complementary relationships between each other and four types of conventional milk were strong substitutes within the group.

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