What's in a View?

FAME Research Paper No. 79

47 Pages Posted: 21 Jul 2003

See all articles by Steven C. Bourassa

Steven C. Bourassa

Florida Atlantic University

Martin Hoesli

University of Geneva - Geneva School of Economics and Management (GSEM); Swiss Finance Institute; University of Geneva - Research Center for Statistics; University of Aberdeen - Business School

Jian Sun

University of Louisville - School of Urban & Public Affairs

Date Written: April 14, 2003

Abstract

The impact of views on property values has not been the specific focus of as much research as has the impact of other externalities on property values. When the impact of views is assessed, this is often done by simply adding a dummy variable for views in hedonic regression equations. This paper provides a detailed literature review as well as an empirical analysis of the impact of a view on residential property values using a very rich database of nearly 5,000 sales in Auckland, New Zealand. Several dimensions of a view are analyzed (type of view, scope of view, distance to coast, and quality of surrounding improvements). It is found that wide views of water add an average of 59% to the value of a waterfront property, but that this effect diminishes quite rapidly as the distance from the coast increases. Attractive landscaping and buildings in a property's neighborhood on average add 5% and 37% to value, respectively. Particularly attractive improvements in the immediate surroundings of a property add another 27% to value on average. Our results lead to the conclusion that aesthetic externalities are multi-dimensional and can have a substantial impact on residential property values.

Keywords: Views, Property Values, Hedonic Models, Externalities

JEL Classification: R31

Suggested Citation

Bourassa, Steven C. and Hoesli, Martin Edward Ralph and Sun, Jian, What's in a View? (April 14, 2003). FAME Research Paper No. 79. Available at SSRN: https://ssrn.com/abstract=410729 or http://dx.doi.org/10.2139/ssrn.410729

Steven C. Bourassa (Contact Author)

Florida Atlantic University ( email )

777 Glades Road
Boca Raton, FL 33431
United States
5028077642 (Phone)

Martin Edward Ralph Hoesli

University of Geneva - Geneva School of Economics and Management (GSEM) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, 1211
Switzerland
+41 22 379 8122 (Phone)
+41 22 379 8104 (Fax)

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

University of Geneva - Research Center for Statistics ( email )

Geneva
Switzerland

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom
+41 22 379 8122 (Phone)
+41 22 379 8104 (Fax)

Jian Sun

University of Louisville - School of Urban & Public Affairs ( email )

426 W. Bloom Street
Louisville, KY 40292
United States

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