Can Markets Value Air Quality? A Meta-Analysis of Hedonic Property Value Models

Smith, V. Kerry; Huang, Ju‐Chin

doi:10.1086/261981

Cited by 580 publications

(307 citation statements)

References 34 publications

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“…Most of the environmental and natural resource applications of the hedonic price model relate to housing prices. For example, air pollution (Smith and Huang, 1995), water pollution (Leggett and Bockstael, 2000) and landscape (Geoghegan, Wainger and Bockstael, 1997) were evaluated based on differences in housing prices and level of pollution or distance from the landscape. In the present study, the existence of a hotel room market next to the Mediterranean Sea allows the use of a hedonic price analysis to evaluate the Mediterranean Sea view as an ecosystem service.…”

Section: Literature Reviewmentioning

confidence: 99%

A room with a view—A valuation of the Mediterranean Sea view

Fleischer

2012

Tourism Management

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu 1 Terms of use: Documents in EconStor may A Room with a View -A Valuation of the Mediterranean Sea View AbstractAesthetic view is one of the ecosystem services of the Mediterranean Sea which can be estimated using price differences in the hotel market. Hotels situated on the Mediterranean Sea charge higher prices for a room with a sea view than for a room without it. The value of this view in 10 major Mediterranean regions was estimated in this paper using a hedonic price method. Data on 2,819 hotel rooms in high season and 2,406 rooms in the low season were collected from Booking.com and fixed effects regression was used to estimate the model coefficients. Hotel room prices were found to be higher by about 10% for a room with a view than for one with no view specification. No significant difference was found between regions or season. These findings lend support to the fact that the view of the Mediterranean is equally valued in all regions.

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Section: Literature Reviewmentioning

confidence: 99%

A room with a view—A valuation of the Mediterranean Sea view

Fleischer

2012

Tourism Management

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“…The former refers to methods that use individuals' actual decisions in markets that are related to the good of interest. For instance, property markets have been used to elicit individuals' preferences to reduce the level of air and noise pollution where the relationship between the property prices and pollution levels has been examined (Smith andHuang 1995, Nelson 2008). The RP approach has extensively, especially in the US, been based on labor market data where the compensation workers demand for risker jobs is assumed to reflect their preferences (Viscusi and Aldy 2003).…”

Section: Introductionmentioning

confidence: 99%

Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety

Andersson

Hole

Svensson

2016

Journal of Environmental Economics and Management

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This study elicits individual preferences for reducing morbidity and mortality risk in the context of an infectious disease (campylobacter) using choice experiments. Respondents are in the survey asked to choose between different policies that, in addition to the two health risks, also vary with respect to source of disease being targeted (food or water), when the policy takes place (in time), and the monetary cost. Our results in our baseline model are in line with expectations; respondents prefer the benefits of the program sooner than later, programs that reduce both the mortality and morbidity risk, and less costly programs. Moreover, our results suggest that respondents prefer water-compared with food-safety programs. However, a main objective of this study is to examine scope sensitivity of mortality risk reductions using a novel approach. Our results from a split-sample design suggest that the value of the mortality risk reduction, defined as the value of a statistical life, is SEK 3 177 (USD 483 million) and SEK 50 million (USD 8 million), respectively, in our two sub-samples. This result cast doubt on the standard scope sensitivity tests in choice experiments, and the results also cast doubt on the validity and reliability of VSL estimates based on stated preference (and revealed preference) studies in general. This is important due to the large empirical literature on non-market evaluation and the elicited values' central role in policy making, such as benefit-cost analysis.

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“…Generally, under competitive conditions, a hedonic equilibrium requires that the change in any attribute (at a given level of the other attributes) yield the marginal bid and marginal offer of the buyers and sellers for that characteristic. Thus the hedonic price function (HPF) ''defines'' the market equilibrium, and its slope with respect to each characteristic provides an estimate of residents' marginal WTP for changes in that attribute (Smith and Huang 1995).…”

Section: Hedonic Price Methods (Hpm)mentioning

confidence: 99%

“…A meta-analysis of HPM studies can provide a statistical synthesis of empirical studies focused on a common hypothesis or model. Most such analyses have summarized effect sizes or evaluated the evidence from test results across a variety of different types of experiments (Smith and Huang 1995).…”

Section: Hedonic Price Methods (Hpm)mentioning

confidence: 99%

“…Nonetheless, the findings show that transfer performance gets better when sample size becomes larger. Smith and Huang (1995) examined 86 estimates of marginal WTP for reduction in air pollution (measured by particulate matter) through a review of 37 HPM studies developed between 1967 and 1988 in different areas in the USA. They performed statistical tests to explain the variation in the estimates and concluded that differences of marginal WTP across the cities can be substantial due to variations in local conditions, and they depend largely on market conditions and the procedures used to implement the hedonic models.…”

Section: A Review Of Hpm Studies Applying Benefit Transfermentioning

confidence: 99%

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Exploring Benefit Transfer: Disamenities of Waste Transfer Stations

Eshet

Baron

Shechter

2006

Environ Resource Econ

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Abstract. The benefit transfer method was developed as an alternative way to value externalities using values from studies of similar circumstances, carried out at similar sites somewhere else, given the challenges and high costs inherent in assessing the actual cost. Specifically, in order to test the performance of the benefit transfer method, employing hedonic price models, this study focused on estimates of disamenities associated with waste transfer stations at four different cities in Israel. The sites were intentionally selected to represent a variety of circumstances. We transferred the estimated benefit function from a ''study site'' to a ''policy site''. The goodness of fit was examined by comparing the calculated value, with actual data from the policy site. To test the sensitivity of the benefit transfer function to socioeconomic and housing characteristics, it was repeatedly applied to different sets of observations. The findings suggest that a relatively large number of alternative benefit functions are transferable. Statistical inequality outcome regarding the degree of similarity between samples does not unequivocally rule out the appropriateness of transferring environmental values across studies. Transfer errors varied between )21% and +29%, and the absolute average error for all transfers was 15.4%. Errors were lower for transfer between relatively similar cities in terms of size and location and between sub-samples that were similar in socioeconomic characteristics and housing type. However, when a site with very dissimilar data was involved, the average absolute error rose to 19%.

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Can Markets Value Air Quality? A Meta-Analysis of Hedonic Property Value Models

Cited by 580 publications

References 34 publications

A room with a view—A valuation of the Mediterranean Sea view

A room with a view—A valuation of the Mediterranean Sea view

Valuation of small and multiple health risks: A critical analysis of SP data applied to food and water safety

Exploring Benefit Transfer: Disamenities of Waste Transfer Stations

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