House Prices and Neighbourhood amenities: Beyond the Norm?

M McCord, P Davis, WJ McCluskey, P Bidanset, J McCord, M Haran, S MacIntyre

Research output: Contribution to journalArticle

6 Citations (Scopus)
10 Downloads (Pure)

Abstract

Purpose
Understanding the key locational and neighbourhood determinants and their accessibility is a topic of great interest to policymakers, planners and property valuers. In Northern Ireland, the high level of market segregation means that it is problematic to understand the nature of the relationship between house prices and the accessibility to services and prominent neighbourhood landmarks and amenities. Therefore, this paper aims to quantify and measure the (dis)amenity effects on house pricing levels within particular geographic housing sub-markets.

Design/methodology/approach
Most hedonic models are estimated using regression techniques which produce one coefficient for the entirety of the pricing distribution, culminating in a single marginal implicit price. This paper uses a quantile regression (QR) approach that provides a “more complete” depiction of the marginal impacts for different quantiles of the price distribution using sales data obtained from 3,780 house sales transactions within the Belfast Housing market over 2014.

Findings
The findings emerging from this research demonstrate that housing and market characteristics are valued differently across the quantile values and that conditional quantiles are asymmetrical. Pertinently, the findings demonstrate that ordinary least squares (OLS) coefficient estimates have a tendency to over or under specify the marginal mean conditional pricing effects because of their inability to adequately capture and comprehend the complex spatial relationships which exist across the pricing distribution.

Originality value
Numerous studies have used OLS regression to measure the impact of key housing market externalities on house prices, providing a single estimate. This paper uses a QR approach to examine the impact of local amenities on house prices across the house price distribution.
Original languageEnglish
Pages (from-to)263-289
JournalInternational Journal of Housing Markets and Analysis
Volume11
Issue number2
Early online date3 Apr 2018
DOIs
Publication statusPublished - 31 Aug 2018

Keywords

  • housing markets
  • quantile regression
  • hedonic pricing model
  • house prices.

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