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Environmental Contamination and House Values

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  • Katherine Kiel

    ()
    (Department of Economics, College of the Holy Cross)

Abstract

A house is a bundle of many goods: The number of bedrooms, bathrooms, the quality of local public services, the tidiness of a neighbor’s yard, and the quality of the local environment. If transactions in the housing market reflect the interaction of informed buyers and sellers, then the price that the house sells for is the sum of the prices the buyer is willing to pay for each individual characteristic of the house. It is this notion that motivates environmental economists to study property values. If individuals consider the local environment as a component of the house they purchase, then information on the house and its sales price allows researchers to ‘tease out’ the price that individuals would be willing to pay for environmental goods. This approach relies on the use of the hedonic price model.

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File URL: http://college.holycross.edu/RePEc/hcx/Kiel_HouseValues.pdf
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Bibliographic Info

Paper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0601.

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Length: 23 pages
Date of creation: Jan 2006
Date of revision:
Publication status: Published in Environmental Valuation: Interregional and Intraregional Perspectives, J. I. Carruthers and B. Mundy, B. (eds.), Ashgate:Aldershot, 2006.
Handle: RePEc:hcx:wpaper:0601

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Keywords: hedonic models; environmental prices; housing;

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References

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  20. Alan K. Reichert & Michael Small & Sunil Mohanty, 1992. "The Impact of Landfills on Residential Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 7(3), pages 297-314.
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  26. Katherine Kiel & Michael Williams, 2005. "An Analysis of the Impact of Multiple Environmental Goods on House Prices," Working Papers 0505, College of the Holy Cross, Department of Economics.
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  35. Katherine Kiel & Jennifer Bowen, 2000. "Jointly Estimating the Prices of Environmental Goods: St. Louis as a Case Study," Working Papers 0107, College of the Holy Cross, Department of Economics.
  36. Mendelsohn, Robert & Hellerstein, Daniel & Huguenin, Michael & Unsworth, Robert & Brazee, Richard, 1992. "Measuring hazardous waste damages with panel models," Journal of Environmental Economics and Management, Elsevier, vol. 22(3), pages 259-271, May.
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