The Effects of Cultural Heritage on Residential Property Values: Evidence from Lisbon, Portugal

FEUNL Working Paper Series No. 602

54 Pages Posted: 6 May 2016

See all articles by Sofia F. Franco

Sofia F. Franco

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE); Nova School of Business and Economics

Jacob Macdonald

Nova School of Business and Economics

Date Written: April 30, 2016

Abstract

This paper examines the impact of historic amenities on residential housing prices in the city of Lisbon, Portugal. Our study is directed towards identifying the spatial variation of amenity values for churches, palaces, lithic (stone) architecture and other historic amenities via the housing market, making use of both global and local spatial hedonic models.

Our empirical evidence reveals that different types of historic and landmark amenities provide different housing premiums. While having a local non-landmark church within 100 meters increases housing prices by approximately 4.2%, higher concentrations of non-landmark churches within 1000 meters yield negative effects in the order of 0.1% of prices with landmark churches having a greater negative impact around 3.4%. In contrast, higher concentration of both landmark and non-landmark lithic structures positively influence housing prices in the order of 2.9% and 0.7% respectively.

Global estimates indicate a negative effect of protected zones, however this significance is lost when accounting for heterogeneity within these areas. We see that the designation of historic zones may counteract negative effects on property values of nearby neglected buildings in historic neighborhoods by setting additional regulations ensuring that dilapidated buildings do not damage the city’s beauty or erode its historic heritage.

Further, our results from a geographically weighted regression specification indicate the presence of spatial non-stationarity in the effects of different historic amenities across the city of Lisbon with variation between historic and more modern areas.

Keywords: Spatial Hedonic Models, Historic Amenities

JEL Classification: C21, P25

Suggested Citation

Franco, Sofia F. and Macdonald, Jacob, The Effects of Cultural Heritage on Residential Property Values: Evidence from Lisbon, Portugal (April 30, 2016). FEUNL Working Paper Series No. 602, Available at SSRN: https://ssrn.com/abstract=2776207 or http://dx.doi.org/10.2139/ssrn.2776207

Sofia F. Franco (Contact Author)

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE) ( email )

Rua Miguel Lupi, 20
Lisbon, 1200-781
Portugal
+351-213 925 912 (Phone)
+351-213 971 196 (Fax)

HOME PAGE: http://www.iseg.utl.pt/~uece/

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Jacob Macdonald

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

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