Estimation of bid functions for location choice and price modeling with a latent variable approachReport as inadecuate




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A new approach for the estimation of bid-rent functions for residentiallocation choice is proposed. The method is based on the bid-auction approach andconsiders that the expected maximum bid of the auction is a latent variable that canbe related to observed price indicators through a measurement equation. The methodhas the advantage of allowing for the estimation of the parameters of the bid functionthat explain the heterogeneous preferences of households for location while simultaneouslyadjusting the expected maximum bid to reproduce realistic values. Themodel is applied and validated for a case study on the city of Brussels. Results showthat the proposed model outperforms other methods for bid-rent estimation, both interms of real estate prices and spatial distribution of agents, especially when detaileddata describing the real estate goods and their prices is not available.Nota general

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Author: Hurtubia González, Ricardo Daniel; - Bierlaire, Michel; -

Source: http://repositorio.uchile.cl/



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