Estimating land values using residential sales data

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Authors
Longhofer, Stanley D.
Redfearn, Christian L.
Advisors
Issue Date
2022-10-29
Type
Article
Keywords
Land values , Locally weighted regressions
Research Projects
Organizational Units
Journal Issue
Citation
Longhofer, S. D., & Redfearn, C. L. (2022). Estimating land values using residential sales data. Journal of Housing Economics, 101869. https://doi.org/https://doi.org/10.1016/j.jhe.2022.101869
Abstract

Land prices are at the heart of urban economics but are generally not observed directly. Though they are central to household and firm location choices, land-only sales in urban areas are rare and often outliers. Indeed, urban areas are in part defined by a largely contiguous area of high land-use intensity – those places in which developable land is scarce. In this paper, we make use of more-common market data to infer land prices: house sales. Using locally weighted regressions, we estimate the value of a standardized structure across two urban counties: Maricopa, Arizona and Sedgwick, Kansas. Because the value of the standardized structure should be invariant across different locations in a metropolitan area, any remaining variation in the value surface should reflect differences in land values. By pinning down this surface using vacant lot sales at the periphery, we are able to extract land values throughout the metropolitan area, even in locations where vacant land sales are rare.

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Publisher
Elsevier
Journal
Book Title
Series
Journal of Housing Economics
2022
PubMed ID
DOI
ISSN
1051-1377
EISSN