Cookies?
Library Header Image
LSE Research Online LSE Library Services

Rocketing rents the magnitude and attenuation of agglomeration economies in the commercial property market

Koster, Hans R. A. (2013) Rocketing rents the magnitude and attenuation of agglomeration economies in the commercial property market. SERC Discussion Papers (SERCDP0125). Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

[img]
Preview
PDF
Download (3MB) | Preview

Abstract

Rocketing rents in urban areas are likely explained by agglomeration economies. This paper measures the impact of these external economies on commercial property values using unique micro�]data on commercial rents and employment. A measure of agglomeration is employed that is continuous over space, avoiding the modifiable areal unit problem. To distinguish agglomeration economies from unobserved endowments and shocks, I use temporal variation in densities and instrumental variables. The spatial extent of agglomeration economies is determined by estimating a spatial bandwidth within the model. The results show that agglomeration economies have a considerable impact on rents: a standard deviation increase in employment density leads to an increase in rents of about 10 percent. The geographical extent of these benefits is about 15 kilometres. The bias of ignoring time�]invariant unobserved endowments and unobserved shocks seems to be limited.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2013 The Author
Divisions: Spatial Economics Research Centre
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R30 - General
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R33 - Nonagricultural and Nonresidential Real Estate Markets
Sets: Research centres and groups > Spatial Economics Research Centre
Date Deposited: 31 Jul 2014 08:03
Last Modified: 05 Aug 2019 09:33
Funders: Economic and Social Research Council, Department for Business, Innovation & Skills (BIS), Welsh Assembly Government
URI: http://eprints.lse.ac.uk/id/eprint/58531

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics