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The amenity value of English nature: a hedonic price approach

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  • Steve Gibbons
  • Susana Mourato
  • Guilherme Resende

Abstract

Using 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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File URL: http://eprints.lse.ac.uk/33594/
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Bibliographic Info

Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 33594.

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Length: 35 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:ehl:lserod:33594

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  1. Daniel J. Henderson & Christopher F. Parmeter & Subal C. Kumbhakar, 2007. "Nonparametric estimation of a hedonic price function," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 695-699.
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Cited by:
  1. Wenjie Wu, 2012. "Spatial Variations in Amenity Values: New Evidence from Beijing, China," SERC Discussion Papers 0113, Spatial Economics Research Centre, LSE.
  2. Jean-Sauveur Ay & Raja Chakir & Stephan Marette, 2014. "Does living close to a vineyard increase the willingness-to-pay for organic and local wine?," Working Papers 2014/03, INRA, Economie Publique.
  3. Max Nathan & Henry G. Overman, 2011. "What We Know (and Don't Know) About the Links between Planning and Economic Performance," SERC Policy Papers 010, Spatial Economics Research Centre, LSE.
  4. Öner, Özge, 2013. "RETAIL CITY: Does accessibility to shops explain place attractiveness?," Working Paper Series in Economics and Institutions of Innovation 335, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  5. Max Nathan & Henry G. Overman, 2011. "Assessing the Government's Proposals to Reform the UK Planning System," SERC Policy Papers 011, Spatial Economics Research Centre, LSE.
  6. Steve Gibbons & Henry G. Overman, 2011. "The Future of Rural Policy: Lessons from Spatial Economics," SERC Policy Papers 008, Spatial Economics Research Centre, LSE.

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