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International Journal of Management and Sustainability

December 2012, Volume 1, 2, pp 31-44

The Impact of Neighborhood Characteristics on Housing Prices-An Application of Hierarchical Linear Modeling

Lee Chun Chang


Hui-Yu Lin

Lee Chun Chang 1
Hui-Yu Lin 2

  1. Department of Real Estate Management, National Pingtung Institute of Commerce, Taiwan 1

  2. National Pingtung Institute of Commerce, Department of Real Estate Management, Taiwan 2

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Housing data are of a nested nature as houses are nested in a village, a town, or a county. This study thus applies HLM (hierarchical linear modelling) in an empirical study by adding neighborhood characteristic variables into the model for consideration. Using the housing data of 31 neighborhoods in the Taipei area as analysis samples and three HLM sub-models, this study discusses the impact of neighborhood characteristics on house prices. The empirical results indicate that the impact of various neighborhood characteristics on average housing prices is different and that the impact of house characteristics on house prices is also moderated by neighborhood characteristics.

Contribution/ Originality


Neighborhood characteristics, house prices, hierarchical linear modelling (HLM), random effect, moderate effect.


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