Endogenous Identification of Multiple Housing Price Centers in Metropolitan Areas

Abstract The monocenter model of urban metropolitan areas has come under increasing criticism in recent years. Many urban areas are in fact multicentered. This paper describes a methodology for identifying and ranking the multiple “centers” of a metropolitan area by inferring them from real estate price data. The method generalizes from previous methodologies developed to identify the urban center from density distributions and gravity models. It involves applying maximum likelihood methods to infer the location of each center, testing the relative importance of each, and testing for the significance of the addition of each incremental center. It allows the joint identification of the locations of metropolitan centers as well as their (local) price gradients (or elasticity of price with distance from the centers). It is readily applicable to GIS tools and data. In addition, there are a number of interesting issues that may be addressed by assuming that the nuclei of the city are “unknown” and must be inferred from the data. It is possible, theoretically, for the pinnacles of commercial and residential land price functions to be located in different places. It is possible to describe land pricing functions through identifying a series of “centers” in metropolitan areas that have irregular topography, or where prices follow the contours of transportation arteries. It is possible to identify “inverse centers” that act as troughs—rather than pinnacles—of land gradient functions. It is possible for the center or centers to be located in areas outside the traditional central business district, to move over time, and even for pinnacles to lie outside the urban area itself. The methodology is then applied to real estate transaction prices for Haifa Israel.

[1]  W. Wheaton,et al.  A comparative static analysis of urban spatial structure , 1974 .

[2]  R. Sivitanidou.  Are Center Access Advantages Weakening? The Case of Office-Commercial Markets , 1997 .

[3]  D. Griffith.  Evaluating the transformation from a monocentric to a polycentric city. , 1981 .

[4]  Yannis M. Ioannides,et al.  House Price Dynamics: An International Empirical Perspective , 1997 .

[5]  Harry W. Richardson,et al.  What Happened to the CBD-Distance Gradient?: Land Values in a Policentric City , 1989 .

[6]  R. Muth.  Numerical solution of urban residential land-use models , 1975 .

[7]  Robert W. Helsley,et al.  Urban subcenter formation , 1991 .

[8]  Arthur M. Sullivan,et al.  A general equilibrium model with agglomerative economies and decentralized employment , 1986 .

[9]  G. Papageorgiou.  The Population Density and Rent Distribution Models within a Multicentre Framework , 1971 .

[10]  G Alperovich,et al.  Joint estimation of population density functions and the location of the central business district. , 1994, Journal of urban economics.

[11]  Richard B. Peiser,et al.  The determinants of nonresidential urban land values , 1987 .

[12]  J. Mcdonald.  The identification of urban employment subcenters , 1987 .

[13]  Household location in a linear multi-center metropolitan area , 1977 .

[14]  E. Mills.  Studies in the Structure of the Urban Economy , 1972 .

[15]  H W Richardson,et al.  Residential Property Values, the CBD, and Multiple Nodes: Further Analysis , 1990 .

[16]  W. Alonso.  Location And Land Use , 1964 .

[17]  G. Giuliano,et al.  SUBCENTERS IN THE LOS ANGELES REGION , 1991 .

[18]  Emilio Casetti,et al.  SPATIAL EQUILIBRIUM RESIDENTIAL LAND VALUES IN A MULTICENTER SETTING , 1971 .

[19]  Rena Sivitanidou,et al.  Do Office–Commercial Firms Value Access to Service Employment Centers? A Hedonic Value Analysis within Polycentric Los Angeles , 1996 .

[20]  H W Richardson,et al.  The Distribution of Population and Employment in a Polycentric City: The Case of Los Angeles , 1986, Environment & planning A.

[21]  D A Griffith,et al.  Modelling urban population density in a multi-centered city. , 1981, Journal of urban economics.

[22]  Q. Vuong.  Likelihood Ratio Tests for Model Selection and Non-Nested Hypotheses , 1989 .

[23]  J. Yinger,et al.  Urban models with more than one employment center , 1992 .

[24]  John M. Clapp,et al.  How GIS Can Put Urban Economic Analysis on the Map , 1997 .

[25]  R. Cervero.  America's Suburban Centers: The Land Use-Transportation Link , 1989 .

[26]  R. Muth,et al.  Cities and Housing. , 1970 .

[27]  Masahisa Fujita,et al.  Multiple equilibria and structural transition of non-monocentric urban configurations , 1982 .

[28]  John M. Hartwick,et al.  Efficient Resource Allocation in a Multinucleated City with Intermediate Goods , 1974 .

[29]  John F. McDonald,et al.  Suburban Subcenters and Employment Density in Metropolitan Chicago , 1998 .

[30]  Martin J. Beckmann,et al.  Spatial equilibrium in the housing market , 1974 .

[31]  Stephen Sheppard,et al.  Housing Supply under Rapid Economic Growth and Varying Regulatory Stringency: An International Comparison , 1996 .

[32]  J. Deutsch,et al.  Urban structure with two coexisting and almost completely segregated populations: The case of East and West Jerusalem , 1996 .

[33]  M. White,et al.  Location Choice and Commuting Behavior in Cities with Decentralized Employment , 1988 .

[34]  J. Odland.  THE CONDITIONS FOR MULTI-CENTER CITIES , 1978 .

[35]  K. Small,et al.  Population and employment densities: structure and change. , 1993, Journal of urban economics.

[36]  M. Boarnet.  The Monocentric Model and Employment Location , 1994 .

[37]  Ronald A. Oliveira,et al.  Papageorgiou, George J., ed, Mathematical Land Use Theory. Lexington, Mass.: Lexington Books, D. C. Heath Co., 1976, xx + 307 pp., $27.50 , 1978 .

[38]  M. White,et al.  Firm suburbanization and urban subcenters , 1976 .

[39]  Martin J. Beckmann,et al.  On the distribution of urban rent and residential density , 1969 .

[40]  K Sasaki.  The Establishment of a Subcenter and Urban Spatial Structure , 1990 .

[41]  Kenneth Wieand,et al.  An extension of the monocentric urban spatial equilibrium model to a multicenter setting: The case of the two-center city , 1987 .