Hedonic Housing Prices in Paris: An Unbalanced Spatial Lag Pseudo-Panel Model with Nested Random Effects
Article first published online: 27 FEB 2014
Copyright © 2014 John Wiley & Sons, Ltd.
Journal of Applied Econometrics
Volume 30, Issue 3, pages 509–528, April/May 2015
How to Cite
2015), Hedonic Housing Prices in Paris: An Unbalanced Spatial Lag Pseudo-Panel Model with Nested Random Effects. J. Appl. Econ., 30: 509–528. doi: 10.1002/jae.2377., , and (
- Issue published online: 13 APR 2015
- Article first published online: 27 FEB 2014
- Manuscript Accepted: 4 DEC 2013
- Manuscript Revised: 25 NOV 2013
- Manuscript Received: 20 SEP 2012
This paper estimates a hedonic housing model based on flats sold in the city of Paris over the period 1990–2003. This is done using maximum likelihood estimation, taking into account the nested structure of the data. Paris is historically divided into 20 arrondissements, each divided into four quartiers (quarters), which in turn contain between 15 and 169 blocks (îlot, in French) per quartier. This is an unbalanced pseudo‒panel data containing 156,896 transactions. Despite the richness of the data, many neighborhood characteristics are not observed, and we attempt to capture these neighborhood spillover effects using a spatial lag model. Using likelihood ratio tests, we find significant spatial lag effects as well as significant nested random error effects. The empirical results show that the hedonic housing estimates and the corresponding marginal effects are affected by taking into account the nested aspects of the Paris housing data as well as the spatial neighborhood effects.Copyright © 2014 John Wiley & Sons, Ltd.