Lie symmetry analysis of the effects of urban infrastructures on residential property values.

Chien-Wen Lin,Ya-Fen Wu,Bo-Yan Zhong,Tzer-En Nee,Jen-Cheng Wang,Shao-Wei Leu,Joe-Air Jiang,Shou-Fu Tian

doi:10.1371/journal.pone.0255233

Abstract

Due to the complexity of socio-economic-related issues, people thought of housing market as a chaotic nucleus situated at the intersection of neighboring sciences. It has been known that the dependence of house features on the residential property value can be estimated employing the well-established hedonic regression analysis method in teams of location characteristic, neighborhood characteristic and structure characteristic. However, to further assess the roles of urban infrastructures in housing markets, we proposed a new kind of volatility measure for house prices utilizing the Lie symmetry analysis of quantum theory based on Schrödinger equation, mainly focusing on the effects of transportation systems and public parks on residential property values. Based on the municipal open government data regularly collected for four cities, including Boston, Milwaukee, Taipei and Tokyo, and all spatial sampling sites were featured by United States Geological Survey (USGS) National Map, transportation and park were modelled as perturbations to the quantum states generated by the feature space in response to the environmental amenities with different spatial extents. In an attempt to ascertain the intrinsic impact of the location-dependent price information obtained, the similarity functions associated with the Schrödinger equation were considered to facilitate revealing the city amenities capitalizing into house prices. By examining the spatial spillover phenomena of house prices in the four cities investigated, it was found that the mass transit systems and the public green lands possessed the infinitesimal generators of Lie point symmetries Y2 and Y5, respectively. Compared statistically with the common performance criteria, including mean absolute error (MAE), mean squared error (MSE) and, root mean squared error (RMSE) obtained by hedonic pricing model, the Lie symmetry analysis of the Schrödinger equation approach developed herein was successfully carried out. The invariant-theoretical characterizations of economics-related phenomena are consonant with the observed residential property values of the cities internationally, ultimately leading to develop a new perspective in the global financial architecture.

Highlights

Big data through the internet providing ubiquitous access to natural and human information is rapidly expanding to all realms of the complex systems such as urban and real estate economics [1,2,3,4,5]
Resulting in low values of the mean absolute error (MAE), mean squared error (MSE) and, root mean squared error (RMSE), it has been widely acknowledged that the hedonic pricing method (HPM) successfully evaluated the influencing factors of house price markets in most individual cities [10,11,12,13,14]
Lie symmetry analysis of the official house price dataset at the worldwide level has been successfully performed to assess the roles of urban infrastructures in housing markets, including Boston, Milwaukee, Taipei and Tokyo, mainly focusing on the effects of transportation systems and public parks on residential property values

Summary

Introduction

Big data through the internet providing ubiquitous access to natural and human information is rapidly expanding to all realms of the complex systems such as urban and real estate economics [1,2,3,4,5]. Based on the general assumption of homogeneity of the housing product, e.g., perfect market operations, the well-established hedonic pricing method (HPM) has deployed regression analysis to explore key impact on the basis of the relationship between the independent and dependent variables. Resulting in low values of the mean absolute error (MAE), mean squared error (MSE) and, root mean squared error (RMSE), it has been widely acknowledged that the HPM successfully evaluated the influencing factors of house price markets in most individual cities [10,11,12,13,14]. The scope and aspect of methodologies and techniques used by city-level studies may be employed only in the specific city, and not be applicable to all metropolitan areas around the globe

Objectives

Methods

Results

Conclusion