July 1, 2022
Bayesian Estimation of the Hierarchical SLX Model with an Application to Housing Markets
Hall, Joshua C.; Lacombe, Donald J.; Neto, Amir; Young, James. (2022). Bayesian Estimation of the Hierarchical SLX Model with an Application to Housing Markets. Journal Of Economics & Finance, 46(2), 360 – 373.
Abstract
Hierarchical or multilevel models have long been used in hedonic models to delineate housing submarket boundaries in order to improve model accuracy. School districts are one important delineator of housing submarkets in an MSA. Spatial hedonic models have been extensively employed to deal with unobserved spatial heterogeneity and spatial spillovers. In this paper, we develop the spatially lagged X (or SLX) hierarchical model to integrate these two approaches to better understanding local housing markets. We apply the SLX hierarchical model to housing and school district test score data from Cincinnati Ohio. Our results highlight the importance of accounting for spatial spillovers and the fact that houses are embedded in school districts which vary in quality. [ABSTRACT FROM AUTHOR]; Copyright of Journal of Economics & Finance is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Keywords
Housing Market; Multilevel Models; Test Scoring; Cincinnati (ohio); Ohio; Bayesian Methods; Slx Model; Spatial Econometrics; Spatial Hierarchical Models
