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A sight for sore eyes: Assessing the value of view and land use in the housing market

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Author Info

  • Baranzini, Andrea
  • Schaerer, Caroline

Abstract

We apply a hedonic model to the Geneva-Switzerland rental market to assess the value of view from dwellings and of land uses around buildings. Using a geographic information system, we calculate three-dimensional view variables, accessibility and land use variables. To our knowledge, this is the first paper to develop precise view measures at the dwelling level, considering surrounding land uses, in an urban context and with a large sample of 13,000 observations. The results show that view of various environmental amenities and its size has a significant impact on rents. The estimated rent premium for a dwelling located in a neighbourhood with an extended surface of water can be as high as 3%, and a view of water-covered area can raise rent up to 57%.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Housing Economics.

Volume (Year): 20 (2011)
Issue (Month): 3 (September)
Pages: 191-199

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Handle: RePEc:eee:jhouse:v:20:y:2011:i:3:p:191-199

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Web page: http://www.elsevier.com/locate/inca/622881

Related research

Keywords: Hedonic model Rental market Housing market Value of view Land use impact on rents Geographic information system (GIS);

References

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  1. Steven C. Bourassa & Eva Cantoni & Martin Hoesli, 2010. "Predicting House Prices with Spatial Dependence: A Comparison of Alternative Methods," Journal of Real Estate Research, American Real Estate Society, vol. 32(2), pages 139-160.
  2. Geoghegan, Jacqueline & Wainger, Lisa A. & Bockstael, Nancy E., 1997. "Spatial landscape indices in a hedonic framework: an ecological economics analysis using GIS," Ecological Economics, Elsevier, vol. 23(3), pages 251-264, December.
  3. Kelejian, Harry H & Prucha, Ingmar R, 1999. "A Generalized Moments Estimator for the Autoregressive Parameter in a Spatial Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 509-33, May.
  4. Elena G. Irwin, 2002. "The Effects of Open Space on Residential Property Values," Land Economics, University of Wisconsin Press, vol. 78(4), pages 465-480.
  5. Tyrvainen, Liisa & Miettinen, Antti, 2000. "Property Prices and Urban Forest Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 205-223, March.
  6. Stephen Malpezzi, . "Hedonic Pricing Models: A Selective and Applied Review," Wisconsin-Madison CULER working papers 02-05, University of Wisconsin Center for Urban Land Economic Research.
  7. I.J. Bateman & A.P. Jones & A.A. Lovett & I.R. Lake & B.H. Day, 2002. "Applying Geographical Information Systems (GIS) to Environmental and Resource Economics," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(1), pages 219-269, June.
  8. Bradford Case & John Clapp & Robin Dubin & Mauricio Rodriguez, 2004. "Modeling Spatial and Temporal House Price Patterns: A Comparison of Four Models," The Journal of Real Estate Finance and Economics, Springer, vol. 29(2), pages 167-191, 09.
  9. Robert W. Paterson & Kevin J. Boyle, 2002. "Out of Sight, Out of Mind? Using GIS to Incorporate Visibility in Hedonic Property Value Models," Land Economics, University of Wisconsin Press, vol. 78(3), pages 417-425.
  10. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  11. Shultz, Steven D & King, David A, 2001. "The Use of Census Data for Hedonic Price Estimates of Open-Space Amenities and Land Use," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 239-52, March-May.
  12. Philippe Thalmann, 1987. "Explication empirique des loyers lausannois," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 123(I), pages 47-70, March.
  13. Benson, Earl D, et al, 1998. "Pricing Residential Amenities: The Value of a View," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 55-73, January.
  14. Palmquist, Raymond B., 2006. "Property Value Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 16, pages 763-819 Elsevier.
  15. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
  16. Michael T. Bond & Vicky L. Seiler & Michael J. Seiler, 2002. "Residential Real Estate Prices: A Room with a View," Journal of Real Estate Research, American Real Estate Society, vol. 23(1/2), pages 129-138.
  17. Acharya, Gayatri & Bennett, Lynne Lewis, 2001. "Valuing Open Space and Land-Use Patterns in Urban Watersheds," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 221-37, March-May.
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Citations

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Cited by:
  1. Walls, Margaret & Kousky, Carolyn & Chu, Ziyan, 2013. "Is What You See What You Get? The Value of Natural Landscape Views," Discussion Papers dp-13-25, Resources For the Future.
  2. Pia Nilsson, 2011. "Cultural Landscape Characteristics and Heritage Values A Spatially Explicit Hedonic Approach," ERSA conference papers ersa10p397, European Regional Science Association.
  3. Andrea Baranzini & Caroline Schaerer & José V. Ramirez & Philippe Thalmann, 2008. "Do Foreigners Pay Higher Rents for the Same Quality of Housing in Geneva and Zurich?," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(IV), pages 703-730, December.
  4. Damrongsak Rinchumphu & Chris Eves & Connie Susilawati, 2013. "Brand Value of Property in Bangkok Metropolitan Region (BMR), Thailand," International Real Estate Review, Asian Real Estate Society, vol. 16(3), pages 296-322.
  5. Jan Melichar & Pavel Rieger & Ondřej Vojáček & Karel Jedlička, 2009. "Measuring the Value of Urban Forest using," Regionální studia, University of Economics, Prague, vol. 2009(2), pages 13-20.

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