Abstract
This study investigates the impact of a shopping center on surrounding housing prices. Instead of using simple Euclidean distance to measure proximity to the shopping center, this study creates multiple sizes of driving time buffers around the shopping center to better reflect real accessibility and to capture the distance-decay effects of the accessibility. We apply a spatial hedonic model with a series of driving time buffer variables to capture the influence of a shopping center in a metropolitan county in Tennessee. The findings suggest that households place a positive value on proximity to a shopping center with a travel time distance of 3–20 min in the case of the Turkey Creek Shopping Center, the largest and most recently developed shopping center in the Knoxville metropolitan area. Based on estimates of enhanced house values as they relate to proximity to the shopping center, we were able to calculate total annual property tax revenues ranging between $1.12 and $1.17 million for the county and city governments owing to the development of the Turkey Creek Shopping center.
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Notes
We experimented with several alternative interaction terms with location dummy variables based on travel-time intervals of 1, 2, 3, and 5 min and found that the results using location dummy variables based on 10 min interval are robust to alternative functional forms.
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Yu, TH., Cho, SH. & Kim, S.G. Assessing the Residential Property Tax Revenue Impact of a Shopping Center. J Real Estate Finan Econ 45, 604–621 (2012). https://doi.org/10.1007/s11146-010-9292-x
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DOI: https://doi.org/10.1007/s11146-010-9292-x