Abstract
ABSTRACTFunctional regression over irregular domains: variation in the shadow price of living space. Spatial Economic Analysis. Hedonic house price models need to account for spatial heterogeneity – the variation in the functional surface of shadow prices. In this context, the complexity of spatial domains raises issues for traditional spatial econometric methods. Specifically, discontinuities in the spatial surface need to be accounted for, including irregular boundaries, peninsulas and interior holes. Motivated by an application to housing markets, we develop a method for estimating the functional surface of a regression coefficient that varies over such an irregular spatial domain. Spatially varying coefficients for a specific regressor are estimated by a combination of three smoothing problems using splines based on finite element analysis. The effect of additional regressors is also allowed. We verify finite sample performance using a simulation study, and develop an application to the Aveiro–Ílhavo urban housing market in Portugal.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
