Empirical agent-based land market: Integrating adaptive economic behavior in urban land-use models

This paper introduces an economic agent-based model of an urban housing market. The RHEA (Risks and Hedonics in Empirical Agent-based land market) model captures natural hazard risks and environmental amenities through hedonic analysis, facilitating empirical agent-based land market modeling. RHEA is well grounded in economic theory and uses rich spatial data and econometric analysis. It moves beyond the existing work by explicitly simulating the emergence of property prices and their spatial distribution under adaptive price expectations of heterogeneous agents, advancing toward empirical modeling of agent-based land markets. At the same time RHEA operates in a realistic GIS landscape where realtor and households agents form ask and bid prices using empirical hedonic price functions. The simulation results demonstrate that this combination of theoretically sound micro-foundations in agents' behavior and empirical data is feasible. This opens opportunities to explore various methodological and policy-relevant research questions including exploration of abrupt non-marginal changes in markets and regime shifts in coupled socio-environmental systems. (C) 2014 Elsevier Ltd. All rights reserved.