The Study of Determinants of Rent Housing in Ilam City Based on Hedonic Spatial Econometrics

Abstract: Housing unit is heterogeneous and multidimensional commodity; therefore, to determine effective factors on rent, hedonic pricing model is used. To explain the factors, four properties are used for housing, which are physical variables of residential units, access variables, environmental variables (neighborhood), and economic and social characteristics. The variables related to the spatial property are used by spatial hedonics to bind the lease function to the location. Spatial hedonic technique is able to determine the effective factors on the rental of housing, also the impact of renting housing from other properties of adjacent ones. In this paper, using linear, semi-logarithmic, logarithmic and box-cox models, the effect of each of the properties of leased residential units on their rental prices has been investigated using simple and spatial hedonic function. The results indicate that the best model is the linear model. Moreover, among the residential apartments in Ilam, physical and socioeconomic factors affect the rental of residential units more than neighborhoods and access variables, as well as the effect of spatial dependent variable in spatial hedonic model on rentals is quite significant and positive. The estimated model of spatial econometric method is well fitted; the percentage of coefficients and the explanation of the effect of the variables in the model are more efficient and better than conventional econometric methods.