Inconsistent effects of a feature on home prices—lang's two‐market explanation

T. Paul Hutchinson

Housing Policy Debate, 2008, vol. 19, issue 3, 573-582

Abstract: In his 2005 article “Valuing the Suburbs: Why Some ‘Improvements’ Lower Home Prices,” Robert E. Lang proposes an explanation of why improvements to a home may either add to or detract from its value. He suggests a dual housing market: “one for conventional low‐density suburbs, and one for cities and denser suburbs” (8). The former values features implying a natural or less intense use, and the latter values features adding “intensity or utility to a property” (8). This article reinterprets Lang's explanation as an example of interaction (something having a different effect under one condition than it does under another) arising via summation followed by a nonlinear function of the result. An alternative explanation in terms of the fit between characteristics of a home and its location is also noted.

Date: 2008
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DOI: 10.1080/10511482.2008.9521647

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