The Effect of Commuting Costs to Employment Centers on Urban Property Values: A Spatial Analysis in Bogotá, Colombia

Fernando Carriazo () and Julian Peñaranda ()

No 13133, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: We study the effect that changes of commuting costs to intra urban employment centers may have on property prices in Bogotá, Colombia. To explore the relationship between prices and communing costs, we use a difference in difference spatial model. Parametric and non-parametric estimations suggest a negative and significant impact of commuting costs on property values for dwellings far away from employment centers. The estimated price elasticity with respect to commuting costs for housing located in distant zones, indicates that a 1% increase in fuel price, reduces property values in 1.48%. Non-parametric Geographically Weighted Regression (GWR) showed to outperform traditional Spatial Autoregressive (SAR, SEM) models.

Keywords: spatial econometrics; non-parametric methods; hedonic model; commuting costs (search for similar items in EconPapers)
JEL-codes: C14 C21 R21 R31 R32 (search for similar items in EconPapers)
Pages: 37
Date: 2015-06-17
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:013133

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