Does the Measurement of Environmental Quality Affect Implicit Prices Estimated from Hedonic Models?

Abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. This content downloaded from 132.236.27.111 on Mon, 22 Jun 2015 18:36:23 UTC All use subject to JSTOR Terms and Conditions ABSTRACT. Hedonic property value models are often used to derive point estimates for identifying the relationship between environmental quality and property prices. The measurement of the environmental quality variable is often selected based on convenience, but variables reflecting different perceptions about environmental quality may result in implicit prices that vary substantially. This case study derives implicit prices for nine measures of water clarity using hedonic property value models of lakefront properties in Maine. Results show that water clarity variables based on different perceptions may result in differences in implicit prices large enough to potentially affect policy decisions. (JEL Q25)

Impacts of changes in water quality on recreation behavior and benefits in Finland

“…Water areas in the nearby living environment and their quality have been found to be a significant factor in hedonic property price studies (e.g. Leggett and Bockstael 2000, Michael et al 2000, Tyrväinen 1997) and in landscape preference studies (e.g. Dramstad 2006).…”

Canals vs. Streams: To What Extent Do Water Quality and Proximity Affect Real Estate Values? A Hedonic Approach Analysis

“…In the literature, hedonic techniques are widely used to estimate the value of environmental amenities that do not have a market but are indirectly capitalized on in the value of residential units [23]. Applying the hedonic model to the property market allows us to highlight the implicit values of water features through the study of the sale price of the properties.…”

Essays in Environmental Economic Valuation and Decision Making in the Presence of an Environmental Disaster

“…In this way, results from the pure objective WQ measures are contrasted with the more easily understood yet objectively based WQ measure of location grade. Boyle et al (1999), Michael et al (2000), Poor et al (2001), and Gibbs et al (2002) all demonstrate that the minimum water clarity value for the year of the home sale matters for Maine and New Hampshire lakefront homebuyers. However, these results are not easily transferable to an urban coastal housing market such as that of Martin County, FL.…”

“…including Boyle et al (1999), Leggett and Bockstael (2000), Michael et al (2000), Poor et al (2001), and Gibbs et al (2002). The purpose of this second essay is to add to this WQ literature by capitalizing on a unique WQ dataset for a year-round, urban, and coastal housing market in Martin County, Florida.…”

“…Additionally, there are questions as to whether homebuyers are incorporating a more scientific but less easily understood objective measure of water quality, or a less scientific but more easily understood subjective measure of WQ into their purchase decision (Epp and Al-Ani, 1979;Michael et al 2000;Poor et al, 2001). The nature of our unique dataset allows us to effectively deal with these issues.…”