regression result from the northeast and northwest rays of the Baltimore study
( Dubin and
Sung, 1987) in which most coefficients of the distance variable are
insignificant. Those two rays are basically residential areas and have large parks.There are a variety of proxies for neighborhood attributes that are used in
previous studies to measure neighborhood environment of housing. Theory
suggests that people include neighborhood environment along with housing
structure and accessibility in the decision making of purchasing a house. There are
three groups of neighborhood proxies that are usually used in empirical studies:
race, socioeconomic neighborhood proxies and public service neighborhood
proxies. The set of neighborhood proxies used in this study is socioeconomic
neighborhood proxies which include average level of education for household
adults and density of population. It is surprising to find that in both areas
neighborhood characteristics fail to show a significant effect on the price gradient.
This result suggests that a household's preference for a house in Taiwan is quite
different from that in the United States. The continual bull market with
skyrocketing stock prices in the 1980s helped quite a few market players earn very
handsome profits. The rezoning of agricultural zones to commercial zones in the 1980s also made many uneducated farmers overnight millionaires. This wave of
income redistribution enabled many undereducated families to afford dwellings in
desirable neighborhoods. In addition, Taiwan is such an extremely populous
country that consumers don't have many choices regarding housing location. On
the other hand, people in the United States have lots of choices in deciding housing
location. There is no racial tension in Taiwan so that neighborhood environment
is seldom a deciding factor of housing prices. These phenomena can explain why
neighborhood characteristics show no significant difference among blocks and fail
to affect price gradient significantly in both study areas of Taichung.
CONCLUSION
The overall regression results are satisfactory and consistent with our
expectations. The only exception is the insignificant effect of neighborhood
characteristics on housing prices. Most coefficients of distance variables show
significant effects on housing prices except the coefficient in the third interval in
the west side of the city. The following are possible topics for further research:| 1. | Regarding the knot point, we pre-specified the knot points according to realistic situations and personal judgments. Some pre-specified knot points turned out to be insignificant. A better approach would be using regression techniques to select significant yet unknown knots. |
| 2. | Regarding distance variables in each interval, using a quadratic or higher order polynomial functional form could better fit the relationship between distance and housing prices. |
| 3. | In a totally different direction, it would be interesting to look into Chinese culture and the Chinese traditional strong desire to own land or houses. Those cultural characteristics might help us better explain the housing market in Asian countries. |
| 4. | Are there any other variables besides typical neighborhood proxies that could be |
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