Segmentation in urban housing markets

Schnare, Ann B.; Struyk, Raymond J.

doi:10.1016/0094-1190(76)90050-4

Cited by 249 publications

(196 citation statements)

References 9 publications

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“…The earliest approaches tended to largely rely on prior knowledge about the market as a means of clustering existing administrative geographic units such as census tracts, electoral districts or postal districts (Ball and Kirwan, 1977;Schnare and Struyk 1976). These methods have now generally been supplanted within the literature by a vast array of increasingly sophisticated empirically determined boundaries (see Tu et al, 2007).…”

Section: Theory Into Practicementioning

confidence: 99%

Defining spatial housing submarkets: Exploring the case for expert delineated boundaries

Keskin

Watkins

2016

Urban Studies

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Although there are numerous reasons for real estate analysts to construct spatial housing submarkets, there is little clarity about how this might best be done in practice. The existing literature offers a variety of techniques including those based on principal components analysis, cluster analysis and a range of other statistical procedures. This paper asks whether, given their market expertise and their role in disseminating information, shaping search patterns and informing bid formation, real estate agents might offer an effective but less data intensive method of submarket construction. The empirical research is based on an experiment that compares the predictive of different sets of submarket boundaries constructed by using either standard statistical methods or through consultation with real estate agents and other market analysts. The analysis draws on housing transactions data from Istanbul, Turkey. While the results do not demonstrate the outright superiority of any single method, they do suggest that expert-defined boundaries tend to perform at least as well as alternative construction techniques. Importantly, the results suggest that agent-based methods for delineating submarket boundaries might be used with a degree of confidence by real estate analysts and planners in market contexts where rich micro-datasets are not readily available. This has been one of the constraints internationally on wider adoption of submarket boundaries as an analytical tool.

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Section: Theory Into Practicementioning

confidence: 99%

Defining spatial housing submarkets: Exploring the case for expert delineated boundaries

Keskin

Watkins

2016

Urban Studies

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“…Market segmentation can be indicated by a Chow (F) test of submarkets (Freeman, 1978;see also Nelson, 1978), or a binary attribute segmenting cases spatially (Freeman, 1979; see also Gleeson, 1979;Beaton, et al, 1977) or socieconomically (Becker, 1957;Harrison and Rubinfeld, 1978;Schnare and Struyk, 1976). While this dissertation focuses attention on the binary approach, the Chow procedure employed initially to test the null hypothesis that the price functions of the "urban" and "rural" submarkets are the same.…”

Section: (I) Market Segmentationmentioning

confidence: 99%

Evaluating urban containment programs

Nelson¹

2000

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Urban containment programs may be evaluated in terms of a theory unifying contributions from the economic, geographic and political science disciplines. The unified theory shows that successful programs will segment the urban-rural land market, remove speculative use value of rural land, and result in the urban land market valuing greenbelt proximity as an amenity.A general model to test urban containment programs against the unified theory is developed and then modified for application to Salem, Oregon. Results are fourfold. First, a gap in the locus of 2 urban and rural land values at the UGB indicates that segmentation of the urban-rural land market is associated with urban containment policies. Second, the simultaneous effect of imposing a UGB proximate to urban development and subjecting rural land to conservancy zoning is to remove the speculative value component of rural land and reveal Sinclair's (1967) underlying convex quadratic agricultural use land value gradient. This finding is important in two respects: (a) it confirms the possibi 1 ity of Sinclair's gradient, which has not been supported empirically hitherto, and (b) it suggests that a program's success in preserving greenbelt land solely for agricultural uses can be evidenced if Sinclair's gradient is revealed. Third, the conditions under which a program may fail to preserve rural land from speculative behavior will be evidenced by the traditional negatively sloping land value gradient. Fourth, where urban development is proximate to a UGB delineating greenbelts, the urban land market will value its proximity as an amenity. This finding is important in two respects: (a) it suggests that proximity to privately owned greenbelts may be valued as an amenity in the urban land market, a finding which has not been reported empirically hitherto, and (b) if an urban land market has confidence in the ability of an urban containment program to prevent sprawl into greenbelts, then it will treat greenbelt proximity as an amenity. The unified theory and methodology developed by this dissertation are generalizable to the evaluation of other urban containment ~rograms. (1) the containment of urbanization within urban growth boundaries (UGBs) and (2) the preservat-jQn of farmland solely for farm uses. Acknowled9'llE!"tsIn the first regard, Oregon's planning program specifically intends to segment the urban-rural fringe land market into distinctive urban and rural submarkets, which is largely accomplished by limiting urban services and urban development to land within a UGB. Second, because the majority of the state's growth occurs in the fertile Wi1lametteValley, Oregon's program specifically intends to protect this farmland from speculators. This is largely accomplished by imposing exceedingly restrictive "exclusive farm use" (EFU) zoning on prime agricultural farmland proximate to urban areas, and this also has the effect of creating a system of greenbelts between urban areas.Hitherto, empirically sound research demonstrating the performance of Oregon's plan...

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“…But at such distances one of the underlying assumptions of the hedonic technique, namely the existence of a unified market for housing and employment within which the net benefits of different locations are eliminated, becomes untenable. As first pointed out by Straszheim (1974) Schnare and Struyk, 1976;and Michaels and Smith, 1990) This study uses the hedonic price approach to investigate household preferences for climate in Germany. Although it is the most populous country in the European Union we are not aware of any research attempting to determine the value of climate amenities to households in Germany.…”

Section: Introductionmentioning

confidence: 99%

The Amenity Value of Climate to German Households

Rehdanz

Maddison

2004

SSRN Journal

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This study uses the hedonic approach to measure the amenity value of climate in Germany.Unlike in earlier research separate hedonic wage and house price regressions are estimated for relatively small geographic areas and formal tests undertaken to determine whether the coefficients describing the impact of climate variables are homogenous across these areas.Evidence suggests that German households are compensated for climate amenities mainly through hedonic housing markets. Given that climate is largely unproductive to industry and few industries spend more on land than labour this is consistent with what theory would predict. Throughout Germany house prices are higher in areas with higher January temperatures, lower July temperatures and lower January precipitation. In East Germany wages are higher in areas with higher January precipitation. The full implicit price of climate variables however is very uncertain.

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Segmentation in urban housing markets

Cited by 249 publications

References 9 publications

Defining spatial housing submarkets: Exploring the case for expert delineated boundaries

Defining spatial housing submarkets: Exploring the case for expert delineated boundaries

Evaluating urban containment programs

The Amenity Value of Climate to German Households

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