Analysing the geological factors in modern property prices

In January this year, David Cameron pledged to regenerate and replace the UK’s worst housing estates with safe and attractive housing for residents to reduce anti-social behaviour and social segregation. This policy continues a longer urban policy focus that targets changing existing urban structures and creating mixed communities.

Christian Nygaard will be speaking at the Centre for Urban Research on his research Rock and Typology: The emergence of modern neighbourhoods and social structures.

The paper is concerned with the emergence of modern urban structures by focusing on the historic processes that, potentially, still condition the existing urban morphology and household location decisions.

Housing markets and urban structures are the result of a complex interplay of economic, social and political factors. This paper analyses the evidence of path dependency in urban structures due to geological factors and the role of geology in the amenity value of housing.

It hypothesises that if geology and topology historically gave rise to systematic variation in patterns of land use and neighbourhood characteristics, then modern property prices and social structures may continue to reflect the geological foundations of cities. A reduced form house price equation is estimated that jointly tests for geologically conditioned low frequency drivers of urban and social structures.

The analysis finds little evidence of geological determinism, but geological and topological factors, relating to amenity value of soil, are found statistically relevant in understanding the distribution of modern property prices.

Dr Christian Nygaard is an Associate Professor in Social Economics & Director for the International Centre for Housing and Urban Economics at the University of Reading.

Image by Pimlico Badger via Flickr.