The Regional Spatial Diversity of Housing Prices and Market Activity – Evidence from Poland

Abstract

The aim of this study is to identify the factors that significantly determine the regional spatial differentiation of housing prices as well as housing market activity in Poland. The present research makes the assumption that average housing prices and market activity (number of transactions) are regionally shaped by economic, social, infrastructural and environmental conditions which can be described as a set of diagnostic features ascribed to a given area, constituting a statistical unit. Furthermore, it is assumed that individual effects may appear, being tied to the idiosyncrasies and significance of the given area. The time horizon of the research is 2008-2018. Based on data sourced from the Central Statistical Office a panel data was prepared for each of 380 Polish districts (poviats). Next, parameters were estimated for a single-factor panel model, as well as a two-factor model in which the constant term is different for different time periods and different units. This resulted in a model encompassing both average price determinants, and individual effects which reflect certain regularities of their spatial distribution. Moreover, the research will result in a set of cartograms made with Geographic Information System tools, depicting the random effects resulting from estimates of panel models using the Nerlove and Swamy-Arora transformations.