Econometric Analysis of the Relationship between Accessibility and Housing Price

Accessibility is one of the major determinants of housing price. To model housing price, many urban researchers have adopted the method of hedonic analysis. The main question addressed in this paper is: Are the existing hedonic price models adequate in capturing the effect of accessibility? In most of these models, accessibility is represented by rather simplistic measures, such as "distance-toCBD" and "distance-to-subcenters". The purpose of this research is to explore alternative measures of accessibility that are more sophisticated, and to construct improved hedonic models by incorporating the new measures. Five models were developed in this research, using a sample of housing transaction data in the Boston Metropolitan Area. Model 1 uses the traditional "distance-to-CBD" as the accessibility measure. Model 2 adopts the subcenter notion of polycentric cities, in which the "distance-to-subcenters" is used in addition to "distance-to-CBD" in modeling housing price. Model 3 explores the impact of the "distance-to-the-closest-subcenters" on housing price. Model 4 incorporates a more sophisticated measure of accessibility that includes the spatial pattern of demand and supply of employment opportunities. Model 5 adds to the 4th model with distances to subcenters. Regression results indicated that the model 5, which combines both the "distance-to-subcenters" and the refined accessibility measure, performed best. Geographic Information System (GIS) plays an important role in this research. From data handling and model building, to subcenter identification and distance calculation, GIS was used intensively. GIS is critical to the success of this research. Thesis Supervisor: Qing Shen Title: Mitsui Assistant Professor of Urban Studies and Planning