Document Type

Conference Proceeding

Abstract

McCluskey and Rausser (2003) examined environmental stigma and neighborhood externality effects for both the short term and long term, respectively within a multiple-equilibrium hedonic model. They report results for a standard distance model and a discontinuous distance model. Questions arise with respect to the practice of estimating either a continuous or discontinuous function given theories of market capitalization and location theory. The purpose of this paper is to examine the theoretical and empirical implications of stigma using a continuous versus discontinuous distance function within a multiple-equilibrium hedonic model. The data set contains 563,618 single family residential homes within Clark County, Nevada sold between January 1985 and December 2005. Preliminary results indicate estimates of distance using a discontinuous function outperform continuous distance functions in multiple submarkets.

Disciplines

Environmental Sciences | Real Estate

Comments

Conference held in San Antonio, TX in December, 2007.


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