Paper wins award at American Real Estate Society annual conference
"Estimating the Impact of Crime on Neighborhood Property Values: A Geospacial Application" won best paper in Spatial Analytics/GIS Applications at the 2019 meeting of the American Real Estate Society annual conference.
The paper was authored by Dr. Ronald W. Spahr and Dr. Mark A. Sunderman, professors in the Finance, Insurance and Real Estate Department of the University of Memphis Fogelman College of Business & Economics; Dr. Ying Huang, former Ph.D. student from the Finance, Insurance and Real Estate Department in the University of Memphis Fogelman College of Business & Economics; and Paul Bidanset, International Association of Assessing Officers, Valuation Research Project Manager and a Ph.D. candidate at Ulster University in Northern Ireland.
The paper examined the impact of crime on neighborhood property values using locational information variables. The crimes differentiated, based on the degree of violence, and the locations were geocoded to calculate the number of crimes and nearest distance of crimes to each property. The crime data was obtained from the Memphis Police Department's real-time crime center and residential single-family sales data was acquired from the Shelby County Assessor's Office.
The authors concluded that both spatial distribution and spatial clustering of crimes negatively impacting housing values increased incrementally with the number and degree of crime violence; however, regardless of the crime category, decreased with increased distances to crime locations.
"We found that crime is a significant, capitalized pricing component in municipality housing valuations," Sunderman said.
Further, the results revealed that increases in the number of neighborhood crimes for most crime categories consistently, significantly and negatively reduced property sale prices.
"Moreover, more violent crimes, such as murder and homicide, cause the largest negative impact on sales prices; however, other less violent crimes also significantly reduce home sale prices," the paper stated.
The Fogelman College of Business & Economics is an AACSB-accredited institution comprising six departments – School of Accountancy; Business Information and Technology; Economics; Finance, Insurance, and Real Estate; Management; and Marketing and Supply Chain Management.