Testing the Waters: A Spatial Econometric Pricing Model of Different Waterfront Views

David Wyman; Norman Hutchison; Piyush Tiwari

Testing the Waters: A Spatial Econometric Pricing Model of Different Waterfront Views

David Wyman, Norman Hutchison, Piyush Tiwari

Research output: Contribution to journal › Article › peer-review

Abstract

This study contrasts the pricing of waterfront view amenities in a South Carolina lakefront community between the bubble and the post-bubble phases of the real estate cycle. Testing for spatial autocorrelation reveals the asymmetrical operation of spatial processes between the two periods. We find that empirical results for quality of view, view aspect orientation, and origin of buyer are affected by the recent recession. Specifically, prices for non-premium view properties suffer disproportionately. These results are confirmed by the construction of a spatial error model that provides an improved fit compared to a standard OLS spatial model.

Original language	English
Pages (from-to)	363-382
Number of pages	20
Journal	Journal of Real Estate Research
Volume	36
Issue number	3
Publication status	Published - 1 Jul 2014

Bibliographical note

Published online 17 Jun 2020

Keywords

waterfront development
econometrics
CAPM
recessions

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https://www.tandfonline.com/doi/abs/10.1080/10835547.2014.12091397Licence: Unspecified

Norman Hutchison
- Business School, Centre for Real Estate Research (CRER)
Person

Cite this

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title = "Testing the Waters: A Spatial Econometric Pricing Model of Different Waterfront Views",

abstract = "This study contrasts the pricing of waterfront view amenities in a South Carolina lakefront community between the bubble and the post-bubble phases of the real estate cycle. Testing for spatial autocorrelation reveals the asymmetrical operation of spatial processes between the two periods. We find that empirical results for quality of view, view aspect orientation, and origin of buyer are affected by the recent recession. Specifically, prices for non-premium view properties suffer disproportionately. These results are confirmed by the construction of a spatial error model that provides an improved fit compared to a standard OLS spatial model.",

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AB - This study contrasts the pricing of waterfront view amenities in a South Carolina lakefront community between the bubble and the post-bubble phases of the real estate cycle. Testing for spatial autocorrelation reveals the asymmetrical operation of spatial processes between the two periods. We find that empirical results for quality of view, view aspect orientation, and origin of buyer are affected by the recent recession. Specifically, prices for non-premium view properties suffer disproportionately. These results are confirmed by the construction of a spatial error model that provides an improved fit compared to a standard OLS spatial model.

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Testing the Waters: A Spatial Econometric Pricing Model of Different Waterfront Views

Abstract

Bibliographical note

Keywords

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Norman Hutchison

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