Publication:
Price and spatial distribution office rental in Madrid: a decision tree analysis

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Date
2021
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Authors
Camacho, Maximo ; Ramallo, Salvador ; Ruiz, Manuel
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Publisher
Pontificia Universidad Católica del Perú
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Métodos Cuantitativos para la Economía y la Empresa
DOI
https://doi.org/10.18800/economia.202101.002
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info:eu-repo/semantics/article
Description
© 2021. The authors. This document is made available under the CC-BY 4.0 license http://creativecommons.org/licenses/by /4.0/ This document is the accepted version of a published work that appeared in final form in Economía
Abstract
In this paper, we assess the drivers of office rental prices in the municipality of Madrid with a sample of 4,721 offices in March, 2020. The estimation was performed using the decision tree approach, which was built with a random forest algorithm. This technique allows us to capture the strong nonlinear component in the relation between price and its drivers, mainly geospatial location. Through a stratified analysis, we find out that the willingness to pay high rent in the center of Madrid is a feature of particular relevance to medium-sized offices. For diferent reasons, we also find out some office clusters located far from the city center with high rent for both large and small offices.
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Spatial economics , Random forest , Nonlinear econometrics , Offices
Citation
Economia Vol 44 (Issue 87), pags 20-40
URI
http://hdl.handle.net/10201/137144
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