Spatial Impacts, Local Labour Market Characteristics and Housing Prices

Abstract

This paper takes as a starting-point a model where spatial variation in housing prices is explained by urban attraction and labour market accessibility effects.Using data from a region in south-west Norway, estimation results are found to be encumbered, however, with significant spatial effects. The spatial Durbin model is used to account for this and to provide estimates of direct and indirect impacts. In addition, hypotheses are tested that some of the spatial variation in housing prices reflects local labour market characteristics. Some support is found for a hypothesis that a model specification should account for sub-centres located at some distance from the central parts of the region. The indirect impacts estimated in the spatial Durbin model suggest that spatially related misspecifications of implicit elasticities in the ordinary least squares model are mainly due to negative externalities close to areas of high labour market accessibility.

Accounting for Local Spatial Heterogeneities in Housing Market Studies

“…Osland and Thorsen () tested for the impact of incorporating several more locally defined measures of spatial structures, mainly related to local labor market accessibility. Such measures, however, only contributed to improving the goodness of fit marginally.…”

“…The housing market data are from the same sources that were used in Osland and Thorsen (, ), but the number of observations has been increased by extending the study period. The sample consists of pooled time series and cross‐section data.…”

“…In the next section, we will present a list of the alternative model formulations to be estimated. Osland and Thorsen (, ) have tested Models 1 and 2 in the list of alternatives for spatial effects, by using robust Lagrange multiplier tests (Osland, ) and the common factor hypothesis test (Mur and Angulo, ). The results from these tests showed that there are still significant spatial effects in the residuals.…”

“…Another typical result in these types of studies is that spatial effects are prevailing in the residuals, even in a seemingly well‐specified regression model. Despite the incorporation of fundamental spatial structure characteristics, and ruling out the spatial lag model, Osland and Thorsen (, ), for instance, still reported significant spatial autocorrelation in the residuals of the regression model. This indicates that there may be a further potential for including spatial covariates in the model formulation.…”

Assessment of territorial benefits and efficiency from the construction of motorway and speed train networks: The Czech case

“…) prices that indicate the use value of sites and structures built upon them, as an endogenous relationship because accessibility capitalises as property prices (cf. Osland and Thorsen, 2013). This immediate and simple methodology obviously cannot be used for the assessment of attractiveness in the future.…”