Housing price gradient changes between Macau and Hong Kong: a neighboring city effect

Purpose – The classical land market model assumes a one‐workplace scenario. However, with the globalization trend, travel between two workplaces is becoming more and more common. This paper therefore aims to study the housing price gradient changes between Macau and Hong Kong to test the two workplaces hypotheses. Design/methodology/approach – The temporal‐spatial difference of housing prices between the two neighboring cities are studied by using a two‐workplace residential location choice model. Findings – This paper found that housing price gradient from Macau to Hong Kong is flattened when more non‐resident workers traveled from Hong Kong to Macau ( ceteris paribus ). Originality/value – The results have important implications for polycentric city models and provide a novel method to study neighboring city effects on housing price.