The nonlinear effect of convenience stores on residential property prices: A case study of Taipei,Taiwan

Abstract

This paper examines the nonlinear effect of convenience stores on residential property prices. In the light of Andrews`s (1964) argument, this study seeks to advance Rosen`s (1974) hedonic housing analysis by hypothesizing that residents` attitudes towards the accessibility of facilities (i.e. convenience stores), which is attributed to the compactness of supply of the services they are interested in accessing while on the move, may further have impact on local property prices.The application of Koenker and Bassett`s (1978) quantile regression on the property data of Taipei found that ‘availability’ of convenience store is positively related to low-quantile property prices, while ‘density’ demonstrates a nonlinear effect – positively related to low-quantile property prices but negatively related to high-quantile property prices. The residents in the neighbourhoods with lower-priced property may prefer accessibility to convenience stores where they can complete multiple tasks in one go, while those in the neighbourhoods with higher-priced property may be more mobile to access convenience stores in other suburbs en route from one place to another.