Abstract

Omitted, misspecified, or mismeasured spatially varying characteristics are a cause for concern in hedonic house price models. Spatial econometrics or spatial fixed effects have become popular ways of addressing these concerns. We discuss the limitations of standard spatial approaches to hedonic modeling and demonstrate the spatial generalized additive model as an alternative. Parameter estimates for several spatially varying regressors are shown to be sensitive to the scale of the fixed effects and bandwidth dimension used to control for omitted variables. This sensitivity reflects the uncertainty associated with the estimates when the appropriate spatial scale of the controls is unknown.

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Additional Information

ISSN
1543-8325
Print ISSN
0023-7639
Pages
pp. 386-409
Launched on MUSE
2015-04-13
Open Access
No
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