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Location in Cities and Variations in Housing Prices

Type of project
01.09.2014 ->

About the project

This project studies how the location of dwellings differs in order to look for patterns in the relationships between the attributes of location and housing prices.  

Only eight percent or less of variation in housing prices is accounted for by macroeconomic factors, the rest is local variations (Glaeser et al. 2014). These local variations depends to a great extent on the location of housing within the market, in our case urban Oslo. Efforts to differentiate what attributes of location that accounts for the variation, so far, has had little connection to architecturally based descriptions of location (Law et al. 2013). Either with too little precision or with too little care to the built form. With developments in the field of GIS we can specify much more in detail how the location of each dwelling differs from each other and so we can look for patterns in the relationships between the attributes of location and housing prices. These relationships can tell us what people find attractive, and are willing to pay for.

The research handles two issues; what attributes of location are affecting housing prices in Oslo and how this relationship affects housing affordability. To investigate the first issue, we look for revealed preferences and set up a hedonic price model, with independent variables measured with care to urban form and architecturally based descriptions of location. This gives us a correlation, but not necessarily a causality. We will look for causality in changes in attributes of location over time through a case study over development projects in Oslo. To investigate the second issue, we read our empirical results through the lens of a theoretical framework around location theory and housing economics.

Supervisor: Bendik Manum