Ahlfeldt, Gabriel M. (2008): If Alonso was Right: Residual Land Price, Accessibility and Urban Attraction.
Download (1MB) | Preview
This study investigates whether accessibility shapes the attractiveness of residential land as predicted by theory. A spatial hedonic analysis is conducted for the metropolitan area of Berlin, Germany, using a large set of georeferenced property transactions and micro-level data. We find that the nuclei of residential land price and employment density gradients are separated by approx. 10 km, which essentially contradicts theoretical implications. Also, environmental externalities arising from the residential composition or the building structure and density in the neighborhood are more important determinants than access to the city center, which, if at all, impacts negatively on residential land prices. Moreover, a new gravity-based accessibility indicator is employed that incorporates the effective distribution of employment as well as the rapid transit network architecture in order to disentangle the effects of proximity to employment opportunities from a more general urban attraction effect. After controlling for accessibility, we find a negative effect of urban attraction, respectively an effect of urban repulsion, indicating a relatively higher attractiveness of peripheral locations. This effect is partially counterbalanced by the benefits arising from access to employment opportunities that are, although relatively dispersed, more concentrated within downtown areas. In the tension between both forces, the land price gradient tends to be, if at all significant, positive. After all, we conclude that if transport costs are very low, commuting costs lose their role as the most striking determinant of land price. These results are robust to spatial dependency.
|Item Type:||MPRA Paper|
|Original Title:||If Alonso was Right: Residual Land Price, Accessibility and Urban Attraction|
|Keywords:||Accessibility, gradient inversion, land price, urban attraction, Berlin|
|Subjects:||R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Systems > R42 - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
|Depositing User:||Gabriel M. Ahlfeldt|
|Date Deposited:||22. Nov 2008 06:56|
|Last Modified:||12. Feb 2013 08:39|
ADAIR, A., MCGREAL, S., SMYTH, A., COOPER, J., & RYLEY, T. (2000). House Prices and Accessibility: The Testing of Relationships within the Belfast Urban Area Housing Studies, 15(5), 699-716.
ALONSO, W. (1964). Location and Land Use: Toward a General Theory of Land Rent. Cambridge, Massachusetts: Harvard University Press.
ANSELIN, L. (1988). Spatial Econometrics: Methods and Models. Dordrecht: Kluwer.
ANSELIN, L. (2003). Spatial Externalities. International Regional Science Review, 26(2), 147.
ANSELIN, L., & BERA, A. K. (1996). Simple Diagnostic Tests for Spatial Dependence. Regional Science & Urban Economics, 26(1), 77.
ANSELIN, L., & BERA, A. K. (1998). Spatial Dependency in Linear Regression Models with an Introduction to Spatial Econometrics. In A. ULLAH & D. E. GILES (Eds.), Handbook of Applied Economic Statistics (pp. 237-289). New York: Marcel Dekker.
ANSELIN, L., & FLORAX, R. J. G. M. (1996). Small Sample Properties of Tests for Spatial Dependency in Regression Models: Some Further Results. In L. ANSELIN & R. J. G. M. FLORAX (Eds.), New Directions in Spatial Econometrics (pp. 21-74). Berlin: Springer.
BECKMANN, M. J. (1969). On the Distribution of Urban Rent and Residential Density. Journal of Economic Theory, 1(1), 60-67.
BORUKHOV, E., & HOCHMAN, O. (1977). Optimum and Market Equilibrium in a Model of a City without a Predetemined Center. Environment and Planning A, 9(8), 849-856.
BRUECKNER, J. K., THISSE, J.-F., & ZENOU, Y. (1999). Why Is Central Paris Rich and Downtown Detroit Poor? An Amenity-Based Theory. European Economic Review, 43(1), 91-107.
CHESHIRE, P. C., & SHEPPARD, S. (1995). On the Price of Land and the Value of Amenities. Economica, 62(246), 247-267.
CHESHIRE, P. C., & SHEPPARD, S. (1997). Welfare Economics of Land Use Regulation. Research Papers in Environmental and Spatial Analysis, 42.
COMMITTEE OF VALUATION EXPERTS IN BERLIN. (2007). Compilation of Purchasing Price Data. Berlin.
CRAFTS, N. (2005). Market Potential in British Regions, 1871-1931. Regional Studies, 39(9), 1159-1166.
DEHRING, C. A., DEPKEN, C. A., & WARD, M. R. (2007). The Impact of Stadium Announcements on Residential Property Values: Evidence from a Natural Experiment in Dallas-Fort Worth. Contemporary Economic Policy, 25(4), 627-638.
FUJITA, M., & OGAWA, H. (1982). Multiple Equilibria and Structural Transition of Non-Monocentric Urban Configurations. Regional Science and Urban Economics, 12(2), 161-196.
GIBBONS, S., & MACHIN, S. (2005). Valuing Rail Access Using Transport Innovations. Journal of Urban Economics, 57(1), 148-169.
HALVORSEN, R., & PALMQUIST, R. (1980). The Interpretation of Dummy Variables in Semilogarithmic Equations. American Economic Review, 70(3), 474-475.
HANSEN, W. G. (1959). How Accessibility Shapes Land Use. Journal of the American Institute of Planners, 25, 73-76.
HARRIS, C. D. (1954). The Market as a Factor in the Localization of Industry in the United States. Annals of the Association of American Geographers, 44(4), 315-348.
HENNEBERRY, J. (1998). Transport Investment and House Prices. Journal of property investment & finance, 16(2), 144-158.
JENKS, G. F. (1977). Optimal Data Classification for Choropleth Maps, Occasional Paper, No. 2. Kansas: Lawrence.
KEEBLE, D., OWENS, P. L., & THOMPSON, C. (1982). Regional Accessibility and Economic Potential in the European Community. Regional Studies, 16(6), 419-431.
LUCAS, R. E., JR. (2001). Externalities and Cities. Review of Economic Dynamics, 4(2), 245-274.
LUCAS, R. E., JR., & ROSSI-HANSBERG, E. (2002). On the Internal Structure of Cities. Econometrica, 70(4), 1445-1476.
MCDONALD, J. F., & BOWMAN, H. W. (1979). Land Value Functions: A Reevaluation. Journal of Urban Economics, 6(1), 25-41.
MCDONALD, J. F., & MCMILLEN, D. P. (1990). Employment Subcenters and Land Values in a Polycentric Urban Area: The Case of Chicago. Environment and Planning A, 22, 1561-1574.
MCMILLEN, D. P. (1996). One Hundred Fifty Years of Land Values in Chicago: A Nonparametric Approach. Journal of Urban Economics, 40(1), 100-124.
MILLS, E. S. (1972). Studies in the Structure of the Urban Economy. Baltimore: Johns Hopkins Press.
MUELLBAUER, J. (1974). Household Production Theory, Quality, and The "Hedonic Technique". American Economic Review, 64(5), 977-994.
MUTH, R. F. (1969). Cities and Housing: The Spatial Pattern of Urban Residential Land Use. Chicago: University of Chicago Press.
OSLAND, L., & THORSEN, I. (2008). Effects on Housing Prices of Urban Attraction and Labor-Market Accessibility. Environment and Planning A, 40, 2490-2509.
PLAUT, P. O., & PLAUT, S. E. (1998). Endogenous Identification of Multiple Housing Price Centers in Metropolitan Areas. Journal of Housing Economics, 7(3), 193-217.
PLAUT, P. O., & PLAUT, S. E. (2003). The Inversion of the Land Gradient in the Inner City of Haifa, Israel. Journal of Real Estate Research, 25(4), 557-576.
ROSEN, S. (1974). Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition. Journal of Political Economy, 82(1), 34-55.
SENATSVERWALTUNG FÜR STADTENTWICKLUNG BERLIN. (2006). Urban and Environmental Information System. Berlin.
SIRMANS, G. S., MACPHERSON, D. A., & ZIETZ, E. N. (2005). The Composition of Hedonic Pricing Models. Journal of Real Estate Literature, 13(1), 3-43.
SOLOW, A. R. (1973). On the Equilibrium Models of Urban Location. In M. PARKIN (Ed.), Essays in Modern Economics. London: Longman.
TEN RAA, T. (1984). The Distribution Apprach to Spatial Economics. Journal of Regional Science, 24(1), 105-117.
VON THÜNEN, J. H. (1826). Der Isolierte Staat in Beziehung Auf Landwirtschaft Und Nationalökonomie, Oder Untersuchungen Über Den Einfluss, Den Die Getreidepreise, Der Reichtum Des Bodens Und Die Abgaben Auf Ackerbau Ausüben. Hamburg: Perthes.
WALDORF, B. S. (2004). Path-Breaking Books in Regional Science. Papers in Regional Science, 83(1), 59-89.