Impacts of environmental disturbances on housing prices: A review of the hedonic pricing literature

Abstract

The global environment is susceptible to many types of change, including alterations to the world's climate. Climate change has been linked to a host of modifications to the natural environment, including the increasing frequency and severity of disturbances such as pest outbreaks, invasions by non-native species, and wildfire. These in turn pose substantial risks to human wellbeing and health. Estimates of the direct and indirect costs of these events are important prerequisites to well-rounded cost-benefit analyses of preventative or control measures, themselves essential components of appropriate education, policy and management responses. This review brings together the evidence with respect to the impacts of disturbances such as pests, invasive species and wildfire on residential property values as measured using the hedonic pricing method. It demonstrates that whilst most disturbances have the expected negative or an insignificant house price impact, in some cases disturbances can lead to housing price rise. The possible causes and implications of these unanticipated positive price responses are discussed. Broader consequences of all directions of price impact are also considered, in particular for the development and implementation of polices designed to prevent the occurrence or spread of disturbances, or at a minimum mitigate their negative effects.

Cross-Societal Analysis of Climate Change Awareness and Its Relation to SDG 13: A Knowledge Synthesis from Text Mining

“…The adverse impacts of climate change have become more noticeable worldwide, the evidence of which, including rising sea levels [1], melting glaciers [2], increasing wildfires, and changing biodiversity, has been observed all over the world [3]. To respond to climate change, all the parties (195 member countries) in the United Nations Framework Convention on Climate Change (UNFCCC) committed to the Paris Agreement in December 2015 with the aim of limiting global warming to well below 2 • C above pre-industrial levels and pursuing efforts to limit warming to 1.5 • C [4,5].…”

Exploring the Spatial Heterogeneity of Residents' Marginal Willingness to Pay for Clean Air in Shanghai

“…Improving air quality will increase the value of houses, and this increase will be passed on to the real estate market in the form of rising housing prices or rents (25)(26)(27). In addition, residents' expectations of air quality also affect current housing prices (28). If real estate owners expect the air quality around their houses to rise in the future, they will have higher estimates of current housing prices, and residents will pay more for the expected clean air.…”

Changes in Amenity Values after COVID‐19 Lockdowns in Auckland, New Zealand

“…We combine hedonic prices valuation with an unprecedented exogenous and non-economic shock that permeated the whole economy. As Auckland suffers from a persistent unaffordability problem whose face may have been altered by the disruptions of the pandemic, policy perspectives should be updated on how amenities should be provided, planned, designed and maintained (Dahal et al, 2019;Nicholls, 2019). Hence, this paper informs planners, policy-makers and private actors with a better understanding of the behaviour of Auckland's housing market.…”