Working Paper: NBER ID: w17809
Authors: H. Spencer Banzhaf; Omar Farooque
Abstract: Understanding the spatial variation in housing prices plays a crucial role in topics ranging from the cost of living to quality-of-life indices to studies of public goods and household mobility. Yet analysts have not reached a consensus on the best source of such data, variously using self-reported values from the census, transactions values, tax assessments, and rental values. Additionally, while most studies use micro-level data, some have used summary statistics such as the median housing value. \n \nAssessing neighborhood price indices in Los Angeles, we find that indices based on transactions prices are highly correlated with indices based on self-reported values, but the former are better correlated with public goods. Moreover, rental values have a higher correlation with public goods and income levels than either asset-value measure. Finally, indices based on median values are poorly correlated with the other indices, public goods, and income.
Keywords: housing prices; public goods; spatial amenities
JEL Codes: H4; R2; R30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| public goods (H41) | housing prices (R31) |
| rental prices (R31) | public goods (H41) |
| housing prices (R31) | value of local amenities (R53) |
| median housing values (R31) | public goods (H41) |
| housing prices (R31) | local amenities (R53) |