2007-01
Errors in Variables and Spatial Effects in Hedonic House
Price Models of Ambient Air Quality
Luc Anselin and Nancy Lozano
In the valuation of the effect of improved air
quality through the estimation of hedonic models of
house prices, the potential errors in variables aspect
of the interpolated air pollution measures is often
ignored. In this paper, we assess the extent to which
this may affect the resulting empirical estimates for
marginal willingness to pay (MWTP), using an extensive
sample of over 100,000 individual house sales for 1999
in the South Coast Air Quality Management District of
Southern California. We take an explicit spatial
econometric perspective and account for spatial
dependence and endogeneity using recently developed
Spatial 2SLS estimation methods. We also account for
both spatial autocorrelation and heteroskedasticity in
the error terms, using the Kelejian-Prucha HAC
estimator. Our results are consistent across different
spatial weights matrices and different kernel functions
and suggest that the bias from ignoring the endogeneity
in interpolated values may be substantial.
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2007-02
Illinois' New Approach to Regulating Predatory Lending:
Unintended Consequences of Borrower Triggers and Spatial
Targeting
Lisa K. Bates and Shannon Van Zandt
Reactions to the recent implementation of Illinois HB
4050 have raised concerns about the implementation of
laws designed to protect borrowers from predatory
practices. While most state laws protections are
triggered by loan characteristics, HB 4050 is triggered
by borrower characteristics, and only in spatially
targeted areas in Chicago. Many lenders have suspended
originations in the target areas, citing uncertainty
about their liability for certifying borrower completion
of counseling. The targeting of lower-income borrowers
in specific inner-city neighborhoods has caused some to
refer to HB 4050 as redlining and to question the
potential for demographic shifts in these neighborhoods.
This paper compares and contrasts key provisions of HB
4050 with other state anti-predatory lending laws to
identify important unintended consequences. Findings
suggest that sales are down compared to previous periods
and the targeted areas bear no clear relationship to
justifications for selecting the targeted area. Avenues
for needed research are identified.
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2007-03
The Rural Role in National Value Chains and Regional
Clusters
Edward Feser and Andrew Isserman
The rural role in value chains, i.e. economic
clusters, is largely overlooked by the conventional
emphasis on linked industries within a given region,
i.e. geographical clusters. The conventional view
defines clusters as groups of interdependent industries
and related supporting institutions co-located in
identifiable regions. A fuller understanding of the
implications of industrial interdependence for economic
development requires separating the economic and spatial
dimensions. We define 45 national value chains and
identify their rural-urban distributions. We also
explore the extent to which rural areas are part of 15
geographical clusters of one particular value chain,
motor vehicles. Our results demonstrate that rural
America is an integral part in a great variety of
national value chains. Federal, state, or local
development agencies must be careful not to view rural
cluster strategy strictly as the development of groups
of linked and related industries concentrated in
specific rural places. There also is an opportunity to
identify and leverage the advantages of rural locations
in globally competitive and geographically extensive
value chains.
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Spatial Policy
Analysis Research Consortium,
University of Illinois at Urbana-Champaign
125 Mumford Hall, MC-710; 1301 Gregory
Drive; Urbana, IL 61801-3605
217-244-1837 |
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