Hedonic Valuation of Land Protection Methods: Implications for Cluster Development

17 Pages Posted: 7 Feb 2014 Last revised: 6 Oct 2015

See all articles by Robert W. Kling

Robert W. Kling

Colorado State University, Fort Collins

T. Scott Findley

Utah State University

Emin Gahramanov

American University of Sharjah - Department of Economics

David Theobald

Colorado State University, Fort Collins

Abstract

This study estimates a generalized spatial hedonic pricing model to assess how residential property values are impacted by inclusion within cluster developments and by proximity to various types of protected land. The estimated model simultaneously controls for the spatial dependence of residential housing prices and for the presence of spatial autocorrelation. The sample includes 4,008 single-family housing sales transactions within the non-urban portions of Larimer County in northern Colorado. The empirical framework accounts for topographical diversity across the study region, as well as distinguishing between several distinct types of publicly and privately protected land. The key findings of the study are: (i) proximity to national or state park land and to city or county open space has a significant positive impact on property values, while proximity to national forest land or to privately conserved land exhibits no significant effects; and, (ii) inclusion of a property within a cluster development decreases its value by 17 to 26 percent. These findings are robust to different estimation techniques and model specifications, which suggests important considerations for policymakers who design development rules and alternative land protection measures aimed at preserving open space in non-urban areas.

Keywords: hedonic valuation, cluster development, open space, spatial dependence, spatial autocorrelation

JEL Classification: Q51, R14, R31, R38

Suggested Citation

Kling, Robert W. and Findley, T. Scott and Gahramanov, Emin and Theobald, David, Hedonic Valuation of Land Protection Methods: Implications for Cluster Development. Journal of Economics and Finance, 39(4), 782-806 (2015), Available at SSRN: https://ssrn.com/abstract=2391963 or http://dx.doi.org/10.2139/ssrn.2391963

Robert W. Kling

Colorado State University, Fort Collins ( email )

Fort Collins, CO 80523-1771
United States

T. Scott Findley (Contact Author)

Utah State University ( email )

Department of Economics and Finance
3565 Old Main Hill
Logan, UT 84322-3565
United States
+001-435-797-2371 (Phone)

HOME PAGE: http://tscottfindley.com

Emin Gahramanov

American University of Sharjah - Department of Economics ( email )

PO Box 26666
Sharjah
United Arab Emirates

David Theobald

Colorado State University, Fort Collins ( email )

Fort Collins, CO 80523-1771
United States

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