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Localized Spatiotemporal Effects in the Determinants of Property Prices: A Case Study of Seoul

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Abstract

This research investigates both spatial and temporal elements of the apartment pricing process in Seoul, South Korea by modeling the determinants of apartment prices over a ten-year period from 2006 to 2015 with a hedonic price model containing a spatio-temporal lag model calibrated by geographically weighted regression (GWR). The results yield information on both spatial and temporal variations in the processes affecting apartment prices and demonstrate the use of GWR for generating local spatial dependency measures which are conditioned on various covariates rather than being simple descriptions of pattern. The study utilizes a combined approach to account for both spatial dependency in housing prices and spatial heterogeneity in the processes generating those prices. The results suggest that there are spatial variations in the determinants of apartment prices and that these spatial variations are fairly consistent over time. The effect of the spatial lag on house prices exhibits strong spatial variation which again is reasonably consistent over time.

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Notes

  1. The use of five nearest neighbours to construct the lag variable is, as always in the construction of spatial lags, subjective but we follow convention and selected the number of nearest neighbors based on generating the most accurate model performance.

  2. The determination of significance was undertaken using the adjustment given by da Silva and Fotheringham (2015) for multiple hypothesis tests. The corrected t value at α = 0.05 was 3.16 for 2007, 3.07 for 2009, 3.21 for 2011, 3.11 for 2013 and 3.26 for 2015.

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Authors and Affiliations

  1. GeoDa Center for Geospatial Analysis and Computation, School of Geographical Sciences and Urban Planning, Arizona State University, Tempe, AZ, 85287, USA

    A. Stewart Fotheringham

  2. Institute of Transportation Studies, Department of Civil and Environmental Engineering, University of California, Irvine, CA, USA

    Bumsub Park

Authors
  1. A. Stewart Fotheringham
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  2. Bumsub Park
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Correspondence to Bumsub Park.

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Stewart Fotheringham, A., Park, B. Localized Spatiotemporal Effects in the Determinants of Property Prices: A Case Study of Seoul. Appl. Spatial Analysis 11, 581–598 (2018). https://doi.org/10.1007/s12061-017-9232-8

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  • DOI: https://doi.org/10.1007/s12061-017-9232-8

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