Application of Hierarchical Spatial Autoregressive Models to Develop Land Value Maps in Urbanized Areas

Abstract

This article aims at testing the possibilities of applying hierarchical spatial autoregressive models to create land value maps in urbanized areas. The use of HSAR (Hierarchical Spatial Autoregressive) models for spatial differentiation of prices in the property market supports the multilevel diagnosis of the structure of this phenomenon, taking into account the effect of spatial interactions. The article applies a two-level hierarchical spatial autoregressive model, which will permit the evaluation of interactions and control spatial heterogeneity at two levels of spatial aggregation (general and detailed). The results of the research include both the evaluation of the impact of location on prices (taking into account non-spatial factors) and the creation of the average land price map, taking into consideration the spatial structure of the city. In empirical studies, the HSAR model was compared with classic LM (Linear Model), HLM (Hierarchical Linear Model), and SAR (Spatial Autoregressive) models to perform comparative analyses of the results.

Keywords

• hierarchical models
• land value maps
• spatial interactions