Spatial and Temporal Dependence in House Price Prediction

Spatial and Temporal Dependence in House Price Prediction This paper incorporates spatial and temporal dependence among housing transactions in predicting future house prices. We employ the spatiotemporal autoregressive model and structure the spatial and temporal weighting matrices as in Pace et al. (1998). We control for the time variation of both the attribute prices and the spatial and temporal dependence parameters through performing the analysis on an annual basis. Spatial heterogeneity is accounted for using experience-based definition of submarkets by real estate professionals. Using a comprehensive housing transaction data set from the Dutch Randstad region, we show that integrating the spatial and temporal dependence within the hedonic modeling improves the prediction power as compared to traditional hedonic model that neglects these effects. The Journal of Real Estate Finance and Economics Springer Journals

Spatial and Temporal Dependence in House Price Prediction

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Springer US
Copyright © 2012 by Springer Science+Business Media, LLC
Economics / Management Science; Regional/Spatial Science; Finance/Investment/Banking
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