IDEAS home Printed from https://ideas.repec.org/a/sae/urbstu/v54y2017i5p1235-1262.html
   My bibliography  Save this article

The amenity value of the British climate

Author

Listed:
  • Helena Meier

    (Department of Economics and Institute of Energy Economics, University of Cologne, Germany)

  • Katrin Rehdanz

    (Kiel Institute for the World Economy and University of Kiel, Germany)

Abstract

This study explores the amenity value of climate to households in Britain. We employ the hedonic technique and use household panel data to derive the marginal willingness to pay for small changes in climate variables. We analyse both the housing and the labour market. Climate is described in terms of heating, cooling degree and rain days. Evidence suggests that it is the housing market that mainly compensates for climate amenities. According to the results, the relationship between property prices and climate has an inverted u-shape. For the sample, about 50 per cent of the locations are close to the preferred levels of heating and cooling degree days while the results for rain days are more varied. Connecting the results to projections of climate change leads to the conclusion that future developments are likely to move a number of households further away from their preferred climate, thus leading to larger regional disparities.

Suggested Citation

  • Helena Meier & Katrin Rehdanz, 2017. "The amenity value of the British climate," Urban Studies, Urban Studies Journal Limited, vol. 54(5), pages 1235-1262, April.
    • Handle: RePEc:sae:urbstu:v:54:y:2017:i:5:p:1235-1262
    DOI: 10.1177/0042098015622758
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0042098015622758
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0042098015622758?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Sylaja Srinivasan & Geoff Stewart, 2004. "The Quality of Life in England and Wales," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(1), pages 1-22, February.
    2. Cragg, Michael & Kahn, Matthew, 1997. "New Estimates of Climate Demand: Evidence from Location Choice," Journal of Urban Economics, Elsevier, vol. 42(2), pages 261-284, September.
    3. Gyourko, Joseph & Tracy, Joseph, 1991. "The Structure of Local Public Finance and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 774-806, August.
    4. Katrin Rehdanz & David Maddison, 2009. "The amenity value of climate to households in Germany," Oxford Economic Papers, Oxford University Press, vol. 61(1), pages 150-167, January.
    5. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    6. Mahlon R. Straszheim, 1974. "Housing Market Discrimination and Black Housing Consumption," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(1), pages 19-43.
    7. 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..
    8. Sinha, Paramita & Cropper, Maureen L., 2013. "The Value of Climate Amenities: Evidence from US Migration Decisions," RFF Working Paper Series dp-13-01, Resources for the Future.
    9. Matthew E. Kahn, 2009. "Urban Growth and Climate Change," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 333-350, September.
    10. David Albouy & Walter Graf & Ryan Kellogg & Hendrik Wolff, 2016. "Climate Amenities, Climate Change, and American Quality of Life," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(1), pages 205-246.
    11. Jeffrey Englin, 1996. "Estimating the amenity value of rainfall," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 30(3), pages 273-283.
    12. Gabriel, Stuart A. & Mattey, Joe P. & Wascher, William L., 2003. "Compensating differentials and evolution in the quality-of-life among U.S. states," Regional Science and Urban Economics, Elsevier, vol. 33(5), pages 619-649, September.
    13. Blomquist, Glenn C & Berger, Mark C & Hoehn, John P, 1988. "New Estimates of Quality of Life in Urban Areas," American Economic Review, American Economic Association, vol. 78(1), pages 89-107, March.
    14. Chin Hee Hahn & Sang-Hyop Lee & Kyoung-Soo Yoon (ed.), 2012. "Responding to Climate Change," Books, Edward Elgar Publishing, number 14709.
    15. Cragg, Michael I. & Kahn, Matthew E., 1999. "Climate consumption and climate pricing from 1940 to 1990," Regional Science and Urban Economics, Elsevier, vol. 29(4), pages 519-539, July.
    16. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. Maddison, David & Bigano, Andrea, 2003. "The amenity value of the Italian climate," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 319-332, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eda Ustaoglu & Chris Jacobs-Crisioni, 2022. "What Drives Residential Land Expansion and Densification? An Analysis of Growing and Shrinking Regions," Land, MDPI, vol. 11(10), pages 1-27, September.
    2. Mark J Holmes & Jesús Otero & Theodore Panagiotidis, 2018. "Climbing the property ladder: An analysis of market integration in London property prices," Urban Studies, Urban Studies Journal Limited, vol. 55(12), pages 2660-2681, September.
    3. Peñasco, Cristina & Anadón, Laura Díaz, 2023. "Assessing the effectiveness of energy efficiency measures in the residential sector gas consumption through dynamic treatment effects: Evidence from England and Wales," Energy Economics, Elsevier, vol. 117(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinha, Paramita & Caulkins, Martha L. & Cropper, Maureen L., 2018. "Household location decisions and the value of climate amenities," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 608-637.
    2. David Albouy & Walter Graf & Ryan Kellogg & Hendrik Wolff, 2016. "Climate Amenities, Climate Change, and American Quality of Life," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(1), pages 205-246.
    3. Kahn, Matthew E. & Walsh, Randall, 2015. "Cities and the Environment," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 405-465, Elsevier.
    4. Thomas Murray & David Maddison & Katrin Rehdanz, 2013. "Do Geographical Variations In Climate Influence Life-Satisfaction?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-21.
    5. Sinha, Paramita & Caulkins, Martha & Cropper, Maureen, 2021. "The value of climate amenities: A comparison of hedonic and discrete choice approaches," Journal of Urban Economics, Elsevier, vol. 126(C).
    6. Rehdanz, Katrin & Maddison, David, 2005. "Climate and happiness," Ecological Economics, Elsevier, vol. 52(1), pages 111-125, January.
      • Katrin Rehdanz & David J. Maddison, 2003. "Climate and Happiness," Working Papers FNU-20, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    7. Sinha, Paramita & Cropper, Maureen L., 2013. "The Value of Climate Amenities: Evidence from US Migration Decisions," RFF Working Paper Series dp-13-01, Resources for the Future.
    8. Severen, Christopher & Costello, Christopher & Deschênes, Olivier, 2018. "A Forward-Looking Ricardian Approach: Do land markets capitalize climate change forecasts?," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 235-254.
    9. Shi, Tie & Zhu, Wenzhang & Fu, Shihe, 2021. "Quality of life in Chinese cities," China Economic Review, Elsevier, vol. 69(C).
    10. Cragg, Michael I. & Kahn, Matthew E., 1999. "Climate consumption and climate pricing from 1940 to 1990," Regional Science and Urban Economics, Elsevier, vol. 29(4), pages 519-539, July.
    11. Katrin Rehdanz, 2002. "Hedonic Pricing Of Climate Change Impacts To Households In Great Britain," Working Papers FNU-13, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2002.
    12. David Albouy & Walter Graf & Ryan Kellogg & Hendrik Wolff, 2010. "Aversion to Extreme Temperatures, Climate Change, and Quality of Life," Working Papers UWEC-2011-03, University of Washington, Department of Economics.
    13. Sinha, Paramita & Caulkins, Martha & Cropper, Maureen L., 2018. "Do Discrete Choice Approaches to Valuing Urban Amenities Yield Different Results Than Hedonic Models?," RFF Working Paper Series 18-02, Resources for the Future.
    14. H. Allen Klaiber & Joshua K. Abbott & V. Kerry Smith, 2017. "Some Like It (Less) Hot: Extracting Trade-Off Measures for Physically Coupled Amenities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(4), pages 1053-1079.
    15. Dan S. Rickman, 2014. "Assessing Regional Quality of Life: A Call for Action in Regional Science," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 1-12, Spring.
    16. Yan Song & Jiang Zhou & Yingjie Zhang & Dingxin Wu & Honghai Xu, 2022. "How Much Are Amenities Worth? An Empirical Study on Urban Land and Housing Price Differentials across Chinese Cities," Land, MDPI, vol. 11(6), pages 1-16, June.
    17. Shelby Gerking, 1998. "Spatial economic aspects of the environment and environmental policy: New directions for research," ERSA conference papers ersa98p384, European Regional Science Association.
    18. Berry, Kevin & James, Alexander & Smith, Brock & Watson, Brett, 2022. "Geography, Geology, and Regional Economic Development," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    19. Katrin Rehdanz & David Maddison, 2004. "The Amenity Value of Climate to German Households," Discussion Papers of DIW Berlin 414, DIW Berlin, German Institute for Economic Research.
    20. Rappaport, Jordan, 2007. "Moving to nice weather," Regional Science and Urban Economics, Elsevier, vol. 37(3), pages 375-398, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:urbstu:v:54:y:2017:i:5:p:1235-1262. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.gla.ac.uk/departments/urbanstudiesjournal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.