Spatial Hedonics and the Willingness to Pay for Residential Amenities

13 Pages Posted: 21 Sep 2012

See all articles by Kenneth A. Small

Kenneth A. Small

University of California, Irvine - Department of Economics

Seiji S. C. Steimetz

affiliation not provided to SSRN

Date Written: October 2012

Abstract

We investigate the role of spatial multipliers when using spatial‐lag hedonic models to measure the benefits of residential amenity improvements. Such benefits are commonly measured using the product of the coefficient of the amenity in question and a spatial multiplier. We show this is correct only when the spatial spillovers transmitted through the multiplier are strictly technological. If they are instead strictly pecuniary, then benefits are fully measured using the coefficient with no spatial multiplier. In either case, or in intermediate cases where both types of spillovers exist, a spatial‐lag specification is required to obtain valid benefits measures.

Suggested Citation

Small, Kenneth A. and Steimetz, Seiji S. C., Spatial Hedonics and the Willingness to Pay for Residential Amenities (October 2012). Journal of Regional Science, Vol. 52, Issue 4, pp. 635-647, 2012. Available at SSRN: https://ssrn.com/abstract=2150012 or http://dx.doi.org/10.1111/j.1467-9787.2012.00774.x

Kenneth A. Small (Contact Author)

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States
714-824-5658 (Phone)
714-824-2182 (Fax)

Seiji S. C. Steimetz

affiliation not provided to SSRN

No Address Available

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