Identifying Multiple Scales of Spatial Heterogeneity in Housing Prices Based on Eigenvector Spatial Filtering Approaches

Abstract

Interest in studying the urban real estate market, especially in investigating the relationship between house prices and related housing characteristics, is rapidly growing. However, this increasing attention is handicapped by a limited consideration of the multi-scale spatial heterogeneity in these relationships. This study uses the rental price data of 72,466 apartments in the Tokyo metropolitan area to examine spatial heterogeneity in the real estate market at multiple spatial scales. Within the framework of spatially varying coefficient (SVC) modeling, we utilized a random effect eigenvector spatial filtering-based SVC (RE-ESF-SVC) model, an approach not previously employed in real estate studies, and compared it with the traditional ESF-SVC model, which has no random effects. Our results show that: (1) except for one housing characteristic that impacts prices consistently throughout the Tokyo metropolitan area, relationships between other characteristics and prices vary from local to global spatial scales; (2) because of the utilization of random effects, RE-ESF-SVC has the unique advantage of making estimations flexibly while maintaining a high performance.