Confronting Price Endogeneity in a Duration Model of Residential Subdivision Development
住宅地块开发持续期模型中的价格内生性
Summary Spatial equilibrium implies that distant factors are correlated with local prices through market mechanisms. Using this logic, we develop a novel approach for handling price endogeneity in land use models. We combine a control function approach with a duration model to identify the impact of prices in influencing land conversion. We find that failure to control for endogeneity results in large differences in elasticities. Specifically, we find an elasticity of 2.06…