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The Influence of Reference Group House Size on House Price
Author(s) -
Leguizamon Susane
Publication year - 2010
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/j.1540-6229.2010.00275.x
Subject(s) - house price , glory , economics , econometrics , autoregressive model , group (periodic table) , lower house , consumption (sociology) , statistics , mathematics , art , physics , law , quantum mechanics , parliament , politics , political science , optics , aesthetics
This article examines the effect of a change in housing consumption of various reference groups on predicted own house price. I employ a spatial autoregressive model and find that an increase in average house size of the eight nearest neighbors and the largest houses in the district has a negative effect on predicted house price, whereas the effect of an increase in average house size of the further neighbors (9th through 16th neighbors) and the smallest houses in the district on predicted house price is positive. This suggests that the “envy effect” dominates with respect to the nearest and largest neighbors, whereas the “basking in the reflected glory” effect dominates with respect to the further smallest neighbors.