Incorporating spatial dynamics and temporal dependency in land use change models

This paper formulates an empirical discrete land-use model within a spatially explicit economic structural framework for land-use change decisions. The underlying framework goes beyond mechanistic fitting models for the spatial process of land use change to more closely link landowner decision behavior to land use patterns. At the same time, the paper explicitly considers spatial “spillover” effects in the decisions of land-owners of proximately located parcels. These “spillover” or peer influences may be due to strategic or collaborative partnerships between land owners, and can be associated with observed variables to the analyst (such as accessibility to city centers and market places) and unobserved variables to the analyst (such as perhaps soil quality and neighborhood attitudes/politic s). In addition to spatial spillover effects, it is also likely that there is heterogeneity in the decision-making process of different land owners because of differential responsiveness to various signals relevant to decision-making. This leads to a stationary across-time correlation in land uses for the same spatial unit. The paper accommodates these technical considerations by formulating a random-coefficients spatial lag discrete choice model using a fine resolution for the spatial unit of analysis. Time-varying random effects are also considered to capture the effects of time -varying unobserved factors (for instance, unobserved land owner attitudes regarding specific land uses may shift over time). The model is estimated using Bhat’s (2011) maximum approximate composite marginal likelihood (MACML) inference approach. The analysis is undertaken using the City of Austin parcel-level land use database for multiple years ( 1995, 2000, 2003, and 2006). The estimation results indicate that proximity to highways and other roadways, distance from flood plains, parcel location in the context of existing development, and distance from schools are all important determinants of land-use. As importantly, the results provide very strong evidence of temporal dependency and spatial dynamics in land-use decisions. There is also a suggestion that major highways may not only physically partition regions, but may also act as social barriers for didactic interactions among individuals.