Year Published
2004
Abstract
We examine commercial land markets in Krakow, Poland over a ten-year period of transition
from socialist management to a market economy. We explore the spatial and temporal evolution
of land prices over this period. In particular, we are interested in identifying trends toward or
away from centrality, and in discovering whether or not these trends acted on the city center alone
or over a set of centers. The data set we employ is uniquely appropriate for this purpose as the
densifying force of \highest-and-best" use - typically found in market-oriented cities - was absent
under four decades of socialist planning, leaving undeveloped land scattered throughout the city.
Free of quality-control issues associated with disentangling the value of land from properties in
which land and structures are bundled, the data o®er a clean assessment of land prices within an
urban area. We employ a novel, iterative approach to identify pricing centers -\nodes" of similarly-
sized residuals - which we interpret as evidence of omitted spatial amenities. Using this approach,
we find that the price gradient in Krakow evolved towards concentration, but concentration in
several centers rather than in just one. We find that the exclusion of proximity to these centers
leads to biased coefficients in the hedonic regressions; we also find that the majority of the apparent
spatial autocorrelation in the aspatial regressions results from the omission of proximity to these
centers.
from socialist management to a market economy. We explore the spatial and temporal evolution
of land prices over this period. In particular, we are interested in identifying trends toward or
away from centrality, and in discovering whether or not these trends acted on the city center alone
or over a set of centers. The data set we employ is uniquely appropriate for this purpose as the
densifying force of \highest-and-best" use - typically found in market-oriented cities - was absent
under four decades of socialist planning, leaving undeveloped land scattered throughout the city.
Free of quality-control issues associated with disentangling the value of land from properties in
which land and structures are bundled, the data o®er a clean assessment of land prices within an
urban area. We employ a novel, iterative approach to identify pricing centers -\nodes" of similarly-
sized residuals - which we interpret as evidence of omitted spatial amenities. Using this approach,
we find that the price gradient in Krakow evolved towards concentration, but concentration in
several centers rather than in just one. We find that the exclusion of proximity to these centers
leads to biased coefficients in the hedonic regressions; we also find that the majority of the apparent
spatial autocorrelation in the aspatial regressions results from the omission of proximity to these
centers.
Research Category