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The Influence Of Water Quality On The Housing Price Around Lake Erie

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  • Ara, Shihomi
  • Irwin, Elena G.
  • Haab, Timothy C.

Abstract

The primary objective of this paper is to estimate the influence of Lake Erie water quality on the housing price by taking spatial effects into account. The robust LM tests for spatial autocorrelation suggested that spatial error model specification is more likely model in our study. Fecal coliform counts and Secchi depth disk reading are used as water quality measures. In order to overcome the spatio-temporal aspects of Secchi depth disk reading data, Kriging was used for spatial prediction. We found the significant influences of both water quality measures on housing values. Gradient effects considering the distance from a beach and water quality variables are also observed.

Suggested Citation

  • Ara, Shihomi & Irwin, Elena G. & Haab, Timothy C., 2006. "The Influence Of Water Quality On The Housing Price Around Lake Erie," 2006 Annual meeting, July 23-26, Long Beach, CA 21275, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea06:21275
    DOI: 10.22004/ag.econ.21275
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    References listed on IDEAS

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    1. 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 509-533, May.
    2. Leggett, Christopher G. & Bockstael, Nancy E., 2000. "Evidence of the Effects of Water Quality on Residential Land Prices," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 121-144, March.
    3. Kelejian, Harry H & Prucha, Ingmar R, 1998. "A Generalized Spatial Two-Stage Least Squares Procedure for Estimating a Spatial Autoregressive Model with Autoregressive Disturbances," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 99-121, July.
    4. Donald J. Epp & K. S. Al-Ani, 1979. "The Effect of Water Quality on Rural Nonfarm Residential Property Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(3), pages 529-534.
    5. Won Kim, Chong & Phipps, Tim T. & Anselin, Luc, 2003. "Measuring the benefits of air quality improvement: a spatial hedonic approach," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 24-39, January.
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    Cited by:

    1. Hongxing Liu & Wendong Zhang & Elena Irwin & Jeffrey Kast & Noel Aloysius & Jay Martin & Margaret Kalcic, 2020. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin," Land Economics, University of Wisconsin Press, vol. 96(4), pages 510-530.
    2. Mahesh, Ramachandran, 2015. "Validating Spatial Hedonic Modeling with a Behavioral Approach: Measuring the Impact of Water Quality Degradation on Coastal Housing Markets," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205664, Agricultural and Applied Economics Association.

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