| Abstract: |
This study tries to identify whether the most tourism penetrated places are
the ones which have the greatest influence in terms of house prices because of
tourism. In Chapter 1 we briefly presented the economic, political and real
estate framework of the country and particularly this of the islands. In
chapter 2, we tested standard hedonic model for the housing markets of the
islands which revealed some unique drivers. One of the basic driver, is this
of tourism appearing constantly significant across particular islands; so
natural question out of that is to look deeper into tourism penetration. By
taking Crete Island as a case study, from 2006 to 2012, we firstly structure
tourism indicators for each prefecture. Then, by using the principal component
analysis, we create the Tourism Penetration Index (TPI) of each prefecture and
we rank the four prefectures of Crete from the most tourism penetrated to the
least one. The second stage of the analysis we regress the data of the four
individual prefectures in three steps: firsly, we regress properties without
the TPI effect; secondly, we use the Tourism Penetration Index (TPI) of the
first stage corresponding the prefecture and the year to each observation, so
as to observe its significance to the house prices of each prefecture. To the
last step of the second stage of the analysis, we add to the hedonic models
the TPI of the neighbour prefecture(s), so as to identify whether there is any
the spill-over effect cause by tourism penetration. The focus here is to
identify whether a) the TPIj of a prefecture j is significant on House Prices
of the prefecture, b) its significance on House Prices of each prefecture
follows the same ranking as in first stage and therefore, whether the most
Tourism Penetrated places are the ones whose houses prices have been mostly
affected by tourism penetration, c) House Prices are affected by the TPI of
the neighbour prefecture (tourism spill-over effect). Models are tested for
robustness across several specifications. |