Property Value Impacts of an Environmental Disamenity
22 Pages Posted: 14 Nov 2001
Date Written: April 12, 2000
The purpose of this paper is to quantify the property value impacts of a change in environmental quality by using the hedonic price model. In particular, we focus on the impact of the presence of landfills on nearby residential real estate prices. We combine elements of an urban location choice and hedonic pricing model to estimate the effects of the presence of multiple environmental disamenities on residential real estate prices. We explicitly account for temporal effects by including housing transactions in areas with both open and closed landfills, and control for information effects. In addition, we treat property taxes and prices as being simultaneously determined. Our analysis suggests that closing landfills will not necessarily mitigate property value impacts.
Keywords: hedonic price model, property values, externalities, environment, urban, rural, regional economics
JEL Classification: R33, Q24, H23
Suggested Citation: Suggested Citation