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Spatial analyses in price models: looking for evidence from a land price study

Khalid, Haniza (2014) Spatial analyses in price models: looking for evidence from a land price study. In: International Conference on Research Methods in Management and Social Sciences (ICRMMS-2014), 27-28 September 2014, Kuala Lumpur.

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Abstract

It is well-known that empirical models to estimate determinants of price are generally ad hoc in nature, not least because markets for different goods are affected by different contexts and factors. Even if the good is the same, data and measurement constraints often yield different model specifications (and hence, results) in different studies. Model selection is therefore, a particularly important exercise, one that is hoped to reveal a ‘final’ model which best subscribes to market realities and available data. For a good as heterogeneous as land, where every plot exhibits unique combination of attributes, price studies usually employ the hedonic modeling approach. With the advancement of spatial econometrics and computing abilities, more price studies are incorporating varying forms of spatial analyses to test structural stability of the price function or to control for spatial error dependence and serial auto-regressive effects on price. Estimation of a hedonic price function using Malaysian dataset of agricultural land sales values indicates the presence of spatial disaggregation and spatial dependence. However, diagnostic tests and actual estimation of spatial models are not unambiguous while predicted errors do not seem to vary all that much from ones generated by simpler models. Despite the conceptual appeal of spatial analyses, the inefficiency attributable to spatial biases might not be large enough to cause critical errors in policy decisions.

Item Type: Conference or Workshop Item (UNSPECIFIED)
Additional Information: 3350/38624 -ISSN: 2311-9195 (CD-ROM) -Proceedings of International Conference on Research Methods in Management and Social Sciences (ICRMMS-2014)
Uncontrolled Keywords: hedonic price analysis, agricultural land prices, spatial heterogeneity, spatial dependence, research methods in land.
Subjects: H Social Sciences > HA Statistics > HA29 Theory and method of social science statistics
H Social Sciences > HB Economic Theory > HB131 Methodology.Mathematical economics. Quantitative methods
H Social Sciences > HB Economic Theory > HB221 Price
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr. Haniza Khalid
Date Deposited: 17 Aug 2015 10:36
Last Modified: 18 Jun 2018 21:55
URI: http://irep.iium.edu.my/id/eprint/38624

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