|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CVER | CEP | SERC | STICERD||Cookies?|
Hans R. A.
Paper No' SERCDP0125: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: commercial buildings; hedonic pricing; agglomeration economies; spatial decay; kernel densities
JEL Classification: R30; R33
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
Share this page: Google Bookmarks | Facebook | Twitter
Abstract:Rocketing rents in urban areas are likely explained by agglomeration economies. This paper measures the impact of these external economies on commercial property values using unique micro¿]data on commercial rents and employment. A measure of agglomeration is employed that is continuous over space, avoiding the modifiable areal unit problem. To distinguish agglomeration economies from unobserved endowments and shocks, I use temporal variation in densities and instrumental variables. The spatial extent of agglomeration economies is determined by estimating a spatial bandwidth within the model. The results show that agglomeration economies have a considerable impact on rents: a standard deviation increase in employment density leads to an increase in rents of about 10 percent. The geographical extent of these benefits is about 15 kilometres. The bias of ignoring time¿]invariant unobserved endowments and unobserved shocks seems to be limited.
Copyright © RLAB & LSE 2003 - 2019 | LSE, Houghton Street, London WC2A 2AE | Contact: RLAB | Site updated 20 October 2019