Modeling Spatial and Temporal House Price Patterns: A Comparison of Four Models

Posted: 27 Jan 2004

See all articles by Mauricio Rodriguez

Mauricio Rodriguez

Texas Christian University

Brad Case

Fannie Mae

Robin A. Dubin

Case Western Reserve University - Department of Economics

John M. Clapp

University of Connecticut - Department of Finance

Abstract

This research reports results from a competition on modeling spatial and temporal components of house prices. A large, well-documented database was prepared and made available to anyone wishing to join the competition. To prevent data snooping, out-of-sample observations were withheld; they were deposited with one individual who did not enter the competition, but had the responsibility of calculating out-of-sample statistics for results submitted by the others. The competition turned into a cooperative effort, resulting in enhancements to previous methods including: a localized version of Dubin's kriging model, a kriging version of Clapp's local regression model, and a local application of Case's earlier work on dividing a geographic housing market into districts. The results indicate the importance of nearest neighbor transactions for out-of-sample predictions: spatial trend analysis and census tract variables do not perform nearly as well as neighboring residuals.

Keywords: kriging, out of sample prediction, data snooping, local polynomial regression, smoothing regressions, semiparametric models, cluster analysis, nearest neighbors, hedonic models

Suggested Citation

Rodriguez, Mauricio and Case, Bradford and Dubin, Robin A. and Clapp, John M., Modeling Spatial and Temporal House Price Patterns: A Comparison of Four Models. Available at SSRN: https://ssrn.com/abstract=488784

Mauricio Rodriguez (Contact Author)

Texas Christian University ( email )

P.O. Box 298530
Fort Worth, TX 76129
United States
817-921-7514 (Phone)
817-921-7227 (Fax)

Bradford Case

Fannie Mae ( email )

3900 Wisconsin Avenue, NW
Washington, DC 20016-2892
United States
202-752-4221 (Phone)

Robin A. Dubin

Case Western Reserve University - Department of Economics ( email )

Cleveland, OH 44106
United States
216-368-3981 (Phone)

John M. Clapp

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States
860-983-3685 (Phone)
860-486-0349 (Fax)

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