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The Value of an Apartment with Sunlight and a View: A Quasi-Experimental Analysis

Author

Listed:
  • Hyunki Hong

    (Eugene Asset Management)

  • Hoyong Jung

    (Kookmin University)

  • Duol Kim

    (Myongji University)

Abstract

The Vert-Vill apartments consist of two 32-story buildings of similar structure: Vert-Vill 101 and 102. The tenants enjoyed a beautiful view and sunlight without interruption. However, the construction of The Lucky Golden Suite three meters from Vert-Vill 101 removed Vert-Vill 101’s sunlight and view entirely without impacting Vert-Vill 102. We performed a difference-in-difference analysis using this experimental circumstance and found that access to sunlight and a view account for 18.0% of apartment prices. Our findings suggest that conventional hedonic analysis, which contains the risk of omitted variable bias, may generate biased estimates.

Suggested Citation

  • Hyunki Hong & Hoyong Jung & Duol Kim, 2024. "The Value of an Apartment with Sunlight and a View: A Quasi-Experimental Analysis," Korean Economic Review, Korean Economic Association, vol. 40, pages 177-194.
    • Handle: RePEc:kea:keappr:ker-20240101-40-1-06
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    References listed on IDEAS

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    More about this item

    Keywords

    House Price; Sunlight; View; Amenity; Difference-in-differences; Hedonic Pricing;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • K1 - Law and Economics - - Basic Areas of Law
    • K2 - Law and Economics - - Regulation and Business Law

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