Home Prices and Urban Corridors

This paper describes a semiparametric procedure to recover willingness to pay for housing and neighborhood attributes using a hedonic pricing model that incorporates spatial autocorrelation. To model taste heterogeneity, I estimate consumer preferences from parcel-level attributes in the form of household-specific random utility coefficients. The application here provides a way to reconcile home prices with the synergy created by the spatial dependence of residential homes and urban corridors. Specifically, the respective accessibility and nuisance effects of a commercial, an industrial/ transportation, a recreational corridor, and a highway, in Minneapolis are estimated. Ultimately, this paper addresses the question of how different types of households value different local economic development and housing attributes