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Abstract |
This paper introduces an integrative approach to hedonic house price modeling which utilizes high density 3D airborne laser scanning (ALS) data. In general, it is shown that extracting exploratory variables using 3D analysis – thus explicitly considering high-rise buildings, shadowing effects, etc. – is crucial in complex urban environments and is limited in well-established raster-based modeling. This is fundamental in large-scale urban analyses where essential determinants influencing real estate prices are constantly missing and are not accessible in official and mass appraiser databases. More specifically, the advantages of this methodology are demonstrated by means of a novel and economically important externality, namely incoming solar radiation, derived separately for each flat. Findings from an empirical case study in Vienna, Austria, applying a non-linear generalized additive hedonic model, suggest that solar radiation is significantly capitalized in flat prices. A model comparison clearly proves that the hedonic model accounting for ALS-based solar radiation performs significantly superior. Compared to a model without this externality, it increases the model’s explanatory power by approximately 13% and additionally reduces the prediction error by around 15%. The results provide strong evidence that explanatory variables originating from ALS, explicitly regarding the immediate 3D surroundings, enhance traditional hedonic models in urban environments. |
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