Artículo de revista
Estimation of bid functions for location choice and price modeling with a latent variable approach
Fecha
2014Registro en:
Netw Spat Econ (2014) 14:47–65
DOI: 10.1007/s11067-013-9200-z
Autor
Hurtubia González, Ricardo Daniel
Bierlaire, Michel
Institución
Resumen
A new approach for the estimation of bid-rent functions for residential
location choice is proposed. The method is based on the bid-auction approach and
considers that the expected maximum bid of the auction is a latent variable that can
be related to observed price indicators through a measurement equation. The method
has the advantage of allowing for the estimation of the parameters of the bid function
that explain the heterogeneous preferences of households for location while simultaneously
adjusting the expected maximum bid to reproduce realistic values. The
model is applied and validated for a case study on the city of Brussels. Results show
that the proposed model outperforms other methods for bid-rent estimation, both in
terms of real estate prices and spatial distribution of agents, especially when detailed
data describing the real estate goods and their prices is not available.