Urban design quality and real estate value: in search of a methodological framework

Abstract

This paper presents a critical interdisciplinary examination of the interface between the urban design and real estate disciplines and provides a modus operandi for estimating different aspects of quality design. The purpose of this paper is to provide a framework for further developing hedonic modelling of real estate markets to value urban design quality. It achieves this by investigating in detail the concepts of urban design quality and real estate value, and by advocating the need for an overarching conceptual approach through the application of utility theory that provides the theoretical underpinnings of the framework.

Acknowledgement

The authors would like to thank particularly one anonymous referee for valuable comments which improved this paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. As the review of spatial econometric models is not the scope of this paper, the reader is referred to the seminal work of LeSage and Pace (2009) and, more recently, a complete classification of linear spatial dependence models of cross-sectional data by Elhorst (2014).

2. n: number of observations in the dataset and k: number of variables in the model.

3. Based on the focus of this paper, the terms ‘spatial hedonic’ and ‘spatial econometric’ models are used interchangeably.