Interactive property valuations.
Ioannides, Yannis Menelaos.
- This paper estimates models of social interactions within residential neighborhoods using data on neighborhood clusters for standard metropolitan areas in the United States from the American Housing Survey for 1985 and 1989. It examines effects of social interactions in the form of reaction functions for homeowners' valuation of their properties at the level of the immediate residential neighborho... read moreod, with neighborhoods consisting of a randomly chosen dwelling unit and about ten nearest neighbors. The paper identifies the effect of endogenous social interactions to be significant and large, ranging from 0.587 to 0.770, and much more important then the dynamic (autoregressive) structure of the model when both variables are present and both are significant. The interactive regressions that it reports improve upon commonly used hedonic regressions as well. The paper provides empirical support for the notion, common in the real estate world, of the importance of neighboring properties in property valuations.read less
- Ioannides, Yannis. 2003. "Interactive property valuations." Journal of Urban Economics 53(1): 145-170. doi:10.1016/S0094-1190(02)00509-0.