The Amenity Value of English Nature: A Hedonic Price Approach
AbstractUsing a hedonic property value price approach, we estimate the amenity value associated with proximity to habitats, designated areas, domestic gardens and other natural amenities in England. There is a long tradition of studies looking at the effect of a wide range of environmental amenities and disamenities on property prices. But, to our knowledge, this is the first nationwide study of the value of proximity to a large number of natural amenities in England. We analysed 1 million housing transactions over 1996- 2008 and considered a large number of environmental characteristics. Results reveal that the effects of many of these environmental variables are highly statistically significant, and are quite large in economic magnitude. Gardens, green space and areas of water within the census ward all attract a considerable positive price premium. There is also a strong positive effect from freshwater and flood plain locations, broadleaved woodland, coniferous woodland and enclosed farmland. Increasing distance to natural amenities such as rivers, National parks and National Trust sites is unambiguously associated with a fall in house prices. Our preferred regression specifications control for unobserved labour market and other geographical factors using Travel to Work Area fixed effects, and the estimates are fairly insensitive to changes in specification and sample. This provides some reassurance that the hedonic price results provide a useful representation of the values attached to proximity to environmental amenities in England. Overall, we conclude that the house market in England reveals substantial amenity value attached to a number of habitats, designations, private gardens and local environmental amenities.
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Bibliographic InfoPaper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0074.
Date of creation: Mar 2011
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Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp
amenity value; hedonic price method (HPM); environmental amenities;
Other versions of this item:
- Stephen Gibbons & Susana Mourato & Guilherme Resende, 2014. "The Amenity Value of English Nature: A Hedonic Price Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(2), pages 175-196, February.
- Steve Gibbons & Susana Mourato & Guilherme Resende, 2011. "The amenity value of English nature: a hedonic price approach," LSE Research Online Documents on Economics 33594, London School of Economics and Political Science, LSE Library.
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- R29 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Other
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-03-26 (Agricultural Economics)
- NEP-ALL-2011-03-26 (All new papers)
- NEP-ENV-2011-03-26 (Environmental Economics)
- NEP-TUR-2011-03-26 (Tourism Economics)
- NEP-URE-2011-03-26 (Urban & Real Estate Economics)
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