Abstract
Using 70,822 observations on housing prices from 1969 to 1991 from Fairfax County Virginia, this article demonstrates the substantial benefits obtained by modeling the spatial as well as the temporal dependence of the data. Specifically, the spatiotemporal autoregression with twelve variables reduced median absolute error by 37.35% relative to an indicator-based model with twenty-six variables. One-step ahead forecasts also document the improved performance of the proposed spatiotemporal model. In addition, the article illustrates techniques for rapidly computing the estimates and shows how to compute indices for any location.
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Pace, R.K., Barry, R., Clapp, J.M. et al. Spatiotemporal Autoregressive Models of Neighborhood Effects. The Journal of Real Estate Finance and Economics 17, 15–33 (1998). https://doi.org/10.1023/A:1007799028599
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DOI: https://doi.org/10.1023/A:1007799028599