Liv Osland

Effects on housing prices of urban attraction and labor market accessibility

Through a hedonic approach the authors focus primarily on how house prices vary systematically with respect to some general spatial structure characteristics in a Norwegian region. The introduction of a gravity-based labor-market accessibility measure contributes significantly to explain variation in housing prices, and is used in a model formulation where the distance from the city center is accounted for. Based on these results we suggest a distinction between an urban-attraction effect and a labor-market accessibility effect. Quantitatively, the two distinct effects are found to contribute about equally to intraregional variation in housing prices.

Commuting, Migration, Housing and Labour Markets: Complex Interactions

Commuting, migration, housing and labour markets are important for the overall economy and for the everyday life of many people. Commuting makes up a large part of all journeys world-wide and many resourcedemanding transport investment projects are initiated to cope with this type of travelling. In a range of countries, increasing flows of national and international migration are central determinants of demographic developments. In industrialised countries, the working-age population or those aspiring to be part of the economically active population constitute a large proportion of the total population. Consequently, income earned through working represents a major component of total earnings in these economies (Cahuc and Zylberberg, 2004). In order to obtain an efficient labour market, workers should locate and relocate to where the relevant jobs are to be found. From an economic point of view, commuting and migration are essential elements for obtaining a well-functioning labour market (Fischer et al., 1996; Lux and Sunega, 2012; Zabel, 2012). Finally, housing is a basic good and for many people rents or loan repayments make up a relatively large proportion of their overall budget (OECD, 2011). Moreover, housing represents a dominating element of homeowners’ wealth or equity. Due to its central role during the financial and economic crisis starting around 2007, it has become clear that housing prices are important for the development of the overall economy in many countries (for example, Muellbauer and Murphy, 2008; Zabel, 2012). Housing and labour markets are linked in many ways. When explaining these links it is useful to start with some of the distinguished features of housing markets. As already mentioned, houses frequently constitute a major part of households’ wealth. Moreover, earned income from employment is a major

Housing Prices and Multiple Employment Nodes: Is the Relationship Nonmonotonic?

Standard urban economic theory predicts that house prices will decline with distance from the central business district. Empirical results have been equivocal, however. Disjoints between theory and empirics may be due to a nonmonotonic relationship between house prices and access to employment arising from the negative externalities associated with proximity to multiple centres of employment. Based on data from Glasgow (Scotland), we use gravity-based measures of accessibility estimated using a flexible functional form that allows for nonmonotonicity. The results are thoroughly tested using recent advances in spatial econometrics. We find compelling evidence of a nonmonotonic effect in the accessibility measure and discuss the implications for planning and housing policy.

Spatial Variation in Job Accessibility and Gender: An Intraregional Analysis using Hedonic House-Price Estimation

Using data on single-family detached houses from a Norwegian region, in this paper I study the existence of gender differences in estimated labour-market accessibility between locations. Different specifications of a gravity-based job-accessibility measure are included in hedonic house-price models. I test for significant gender-related differences in the distance-deterrence parameters found in the labour-market accessibility indicator. The estimated distance-deterrence parameters are lower for women than for men. This difference is, however, not significant, given the data. The main gender-related differences relate to the spatial variation in job accessibility as measured here. The supply of relevant jobs is significantly higher for women in the administrative centres of municipalities in the area, and significantly higher for men outside these administrative centres. The attractive forces of the centres could be relevant as an explanation of differentiated gender-related commuting patterns.

Describing Inequalities in Access to Employment and the Associated Geography of Wellbeing

This paper addresses three questions. How unequal is access to urban employment and the wellbeing associated with it? What is the monetary value consumers place on access? How does the inequality of access correspond to the geographical pattern of unemployment? A novel approach is developed using the Osland and Pryce house price model to estimate the monetary value of access welfare (MVAW)—the wellbeing associated with living a given distance from employment, taking into account the negative externalities associated with centres of employment and the complexities that arise from the existence of multiple employment centres of varying size. It is found that: MVAW is considerably more unequal than house prices or income; MVAW contributes around 13 per cent of the average value of a house; and the spatial pattern of unemployment rates is highly inelastic with respect to both MVAW and employment, suggesting no evidence of a spatial mismatch.

Spatial Impacts, Local Labour Market Characteristics and Housing Prices

This paper takes as a starting-point a model where spatial variation in housing prices is explained by urban attraction and labour market accessibility effects. Using data from a region in south-west Norway, estimation results are found to be encumbered, however, with significant spatial effects. The spatial Durbin model is used to account for this and to provide estimates of direct and indirect impacts. In addition, hypotheses are tested that some of the spatial variation in housing prices reflects local labour market characteristics. Some support is found for a hypothesis that a model specification should account for sub-centres located at some distance from the central parts of the region. The indirect impacts estimated in the spatial Durbin model suggest that spatially related misspecifications of implicit elasticities in the ordinary least squares model are mainly due to negative externalities close to areas of high labour market accessibility.

The importance of unobserved attributes in hedonic house price models

Purpose – Hedonic models are commonly used in housing markets studies to obtain quantitative measures of various implicit prices. The use of panel data in other fields of research has proved to be valuable when accounting for unobserved heterogeneity. Given that houses are extremely heterogeneous, and given that it is impossible to include all relevant attributes in hedonic models, removing unobserved heterogeneity by basic panel data models sounds appealing. This paper seeks to compare results between models that use pooled cross section data and panel data. The main research question is whether the pooled model gives unbiased estimates on some basic implicit prices.Design/methodology/approach – The paper applies the hedonic methodology. It uses regression analysis and estimate basic and parsimonious models that use either pooled time series and cross section data or panel data. The empirical results when using the two different approaches are compared.Findings – The paper illustrates that the results fr...

ACCOUNTING FOR LOCAL SPATIAL HETEROGENEITIES IN HOUSING MARKET STUDIES

We adopt a novel method to deal with omitted spatial heterogeneities in hedonic house price analysis. A Gaussian variant of the conditional autoregressive (CAR) model is used to study the impact of spatial effects. In a general linear modeling framework, we include zone‐specific random effects that are allowed to interact spatially with neighboring zones. The results demonstrate that this estimator accounts for missing spatial information, producing more reliable results on estimated spatially related coefficients. The CAR model is benchmarked against a fixed effects model. Socioeconomic neighborhood characteristics are found to have only modest impact on spatial variation in housing prices.

Rural depopulation, labour market accessibility and housing prices

Accessibility models not only help to explain spatial and transport developments in developed and developing countries but also are powerful tools to explain the equity and efficiency impacts of urban and transport policies and projects. In this book, leading researchers from around the world show the importance of accessibility in contemporary issues such as rural depopulation, investments in public services and public transport and transport infrastructure investments in Europe.