0000000001078376
AUTHOR
Sotirios Thanos
A Comprehensive Spatiotemporal Framework for Hedonic Pricing: Integrating the Comparable Sales Approach and Minimizing Spatial Omitted Variable Bias
This paper develops a theoretical and methodological framework that integrates Hedonic Pricing (HP), grid comparable sales approach (CSA), and nearest neighbors into a general spatiotemporal specification. By explicitly providing a theoretical justification for introducing spatial (or spatiotemporal) econometrics to HP, this approach is not only relevant to house price forecasting and automated valuation models (AVM) but also to valuing environmental goods capitalized in housing and to all other fields employing house pricing models. The resulting econometric CSA and spatiotemporal Durbin models provide higher prediction accuracy and reliability to alternatives by reducing the spatially-del…
Past price “memory” in the housing market: testing the performance of different spatio-temporal specifications.
ABSTRACTRecent methodological developments provide a way to incorporate the temporal dimension when accounting for spatial effects in hedonic pricing. Weight matrices should decompose the spatial effects into two distinct components: bidirectional contemporaneous spatial connections; and unidirectional spatio-temporal effects from past transactions. Our iterative estimation approach explicitly analyses the role of time in price determination. The results show that both spatio-temporal components should be included in model specification; past transaction information stops contributing to price determination after eight months; and limited temporal friction is exhibited within this period. T…
Putting time into space: the temporal coherence of spatial applications in the housing market
International audience; Relationships between past events, future expectations and present decisions, typically examined through a temporal prism within applied economics, have been lately moving to the spatial dimension through spatial econometrics. However, violations of the “arrow of time”, and thus causality, have been identified in spatial econometric techniques applied to spatio-temporal data consisting of observations each at a specific location and distinct moment in time. A comprehensive review classifies for the first time several redresses to this issue in a currently fragmented literature. This paper puts back the temporal dimension into spatial Hedonic Pricing models through a …