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Spatio-temporal effects of an urban development announcement and its cancellation on house prices: A quasi-natural experiment

Huyn, D; Milcheva, S; (2019) Spatio-temporal effects of an urban development announcement and its cancellation on house prices: A quasi-natural experiment. Journal of Housing Economics , 43 pp. 23-36. 10.1016/j.jhe.2018.09.008. Green open access

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Abstract

We use a spatio-temporal autoregressive difference-in-differences (SDID) framework to assess the strength of the effect, distributed across space and time, of announcements associated with urban development on house prices. We use a quasi-natural experiment of a large-scale urban redevelopment project in Seoul, South Korea, first announced in 2007 and cancelled six years later without any construction having taken place. Using a rich dataset comprising of 21,200 apartment transactions between 2006 and 2015, we find that the development announcement effect accounts for an increase in apartment transaction prices by up to 7.3% depending on the location of the property from the project site. Prices decrease by up to 5.2% following the cancellation of the project. The SDID captures significant spatial autoregressive effects accounting for up to 15% of the changes in transaction prices, reducing the announcement effects from a standard DID model.

Type: Article
Title: Spatio-temporal effects of an urban development announcement and its cancellation on house prices: A quasi-natural experiment
Open access status: An open access version is available from UCL Discovery
DOI: 10.1016/j.jhe.2018.09.008
Publisher version: https://doi.org/10.1016/j.jhe.2018.09.008
Language: English
Additional information: This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Announcement effect, Spatial spillover, Spatio-temporal autoregressive model, Difference-in-differences, Apartment transaction prices
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
URI: https://discovery.ucl.ac.uk/id/eprint/1571838
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