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Spatial Autocorrelation and Real Estate Studies: A Literature Review

Ismail, Suriatini (2006) Spatial Autocorrelation and Real Estate Studies: A Literature Review. Malaysian Journal of Real Estate, 1 (1). pp. 1-13. ISSN 1823-8505

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Abstract

Spatial autocorrelation is a phenomenon where the values of variable located within certain geographic area show a similar pattern. It is a source of imperfection in house price modelling that employs the popular technique of hedonic regression. Despite its long established concept,it is only recently when spatial autocorrelation has started to gain the attention of real estate studies. However, the evidence has come mainly from the USA. This paper reviews the literature on spatial autocorrelation and real estate studies. It describes some basic aspects of spatial autocorrelation in respect of hedonic price modelling (HPM) for housing markets. The importance of considering spatial autocorrelation and ways of dealing with the phenomenon are outlined. The paper also discusses two main approaches of modelling spatial autocorrelation, namely the spatial weight matrix and the geo-statistical approaches. It stresses the preference of the former in previous real estate studies that involve economic analysis. The paper concludes by highlighting the importance of considering spatial autocorrelation when cross sectional data are used. Evidence from countries including Malaysia would enrich the literature of spatial autocorrelation consideration in real estate studies.

Item Type:Article
Uncontrolled Keywords:spatial autocorrelation; house price modelling; hedonic technique; spatial statistics
Subjects:H Social Sciences > H Social Sciences (General)
H Social Sciences > HA Statistics
Divisions:Geoinformation Science And Engineering (Formerly known)
ID Code:438
Deposited By: Dr Suriatini Ismail
Deposited On:16 Feb 2007 03:14
Last Modified:01 Jun 2010 02:44

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