Confronting Price Endogeneity in a Duration Model of Residential Subdivision Development
Douglas Wrenn (),
Henry Klaiber and
David Newburn ()
No 205556, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association
Spatial equilibrium implies that distant factors are correlated with proximate locations through market mechanisms. Using this logic, we develop a novel approach for handling price endogeneity in reduced-form land use models. We combine a control function approach with a duration model of land development to shed new light on the role of price and supply-side factors that influence subdivision development at a micro level. We find that failure to control for endogeneity results in large differences in estimates of residential land supply price elasticities. Specifically, we find an elasticity of 2.06 compared to 0.67 in a model that ignores potential endogeneity.
Keywords: Land Economics/Use; Research Methods/ Statistical Methods (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Confronting Price Endogeneity in a Duration Model of Residential Subdivision Development (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205556
Access Statistics for this paper
More papers in 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().