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Capitalized amenity value of urban wetlands: a hedonic property price approach to urban wetlands in Perth, Western Australia


  • Sorada Tapsuwan
  • Gordon Ingram
  • Michael Burton
  • Donna Brennan


Up to 60 per cent of potable water supplied to Perth, Western Australia, is extracted from the groundwater system that lies below the northern part of the metropolitan area. Many of the urban wetlands are groundwater-dependent and excessive groundwater extraction and climate change have resulted in a decline in water levels in the wetlands. In order to inform decisions on conserving existing urban wetlands, it is beneficial to be able to estimate the economic value of the urban wetlands. Applying the Hedonic Property Price approach to value urban wetlands, we found that distance to the nearest wetland and the number of wetlands within 1.5 km of a property significantly influence house sales price. For a property that is 943 m away from the nearest wetland, which is the average distance to the wetland in this study, reducing the wetland distance by 1 m will increase the property price by AU$42.40. Similarly, the existence of an additional wetland within 1.5 km of the property will increase the sales price by AU$6976. For a randomly selected wetland, assuming a 20 ha isolated circular wetland surrounded by uniform density housing, the total sales premium to surrounding properties was estimated to be around AU$140 million (AU$40 million and AU$230 million). Copyright 2009 The Authors. Journal compilation 2009 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

Suggested Citation

  • Sorada Tapsuwan & Gordon Ingram & Michael Burton & Donna Brennan, 2009. "Capitalized amenity value of urban wetlands: a hedonic property price approach to urban wetlands in Perth, Western Australia ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), pages 527-545, October.
  • Handle: RePEc:bla:ajarec:v:53:y:2009:i:4:p:527-545

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    References listed on IDEAS

    1. Lupi, Frank & Graham-Tomasi, Theodore & Taff, Steven J., 1991. "A Hedonic Approach To Urban Wetland Valuation," Staff Papers 13284, University of Minnesota, Department of Applied Economics.
    2. Luke Brander & Raymond Florax & Jan Vermaat, 2006. "The Empirics of Wetland Valuation: A Comprehensive Summary and a Meta-Analysis of the Literature," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(2), pages 223-250, February.
    3. Brent L. Mahan & BStephen Polasky & Richard M. Adams, 2000. "Valuing Urban Wetlands: A Property Price Approach," Land Economics, University of Wisconsin Press, vol. 76(1), pages 100-113.
    4. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    5. Peter C. Boxall, Wing H. Chan, and Melville L. McMillan, 2005. "The Impact of Oil and Natural Gas Facilities on Rural Residential Property," Working Papers eg0039, Wilfrid Laurier University, Department of Economics, revised 2005.
    6. Boxall, Peter C. & Chan, Wing H. & McMillan, Melville L., 2005. "The impact of oil and natural gas facilities on rural residential property values: a spatial hedonic analysis," Resource and Energy Economics, Elsevier, vol. 27(3), pages 248-269, October.
    7. Doss, Cheryl R. & Taff, Steven J., 1996. "The Influence Of Wetland Type And Wetland Proximity On Residential Property Values," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), July.
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    Cited by:

    1. Prasad Neelawala & Clevo Wilson & Wasantha Athukorala, 2013. "The impact of mining and smelting activities on property values: a study of Mount Isa city, Queensland, Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), pages 60-78, January.
    2. Tapsuwan, Sorada & Polyakov, Maksym & Bark, Rosalind & Nolan, Martin, 2015. "Valuing the Barmah–Millewa Forest and in stream river flows: A spatial heteroskedasticity and autocorrelation consistent (SHAC) approach," Ecological Economics, Elsevier, vol. 110(C), pages 98-105.
    3. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing scenic amenity using life satisfaction data," Ecological Economics, Elsevier, vol. 72(C), pages 106-115.
    4. Ma, Chunbo & Polyakov, Maksym & Pandit, Ram, 2015. "Solar Capitalization in Western Australian Property Market," Working Papers 199230, University of Western Australia, School of Agricultural and Resource Economics.
    5. Alicia N. Rambaldi & Cameron S. Fletcher & Kerry Collins & Ryan R.J. McAllister, 2013. "Housing Shadow Prices in an Inundation-prone Suburb," Urban Studies, Urban Studies Journal Limited, vol. 50(9), pages 1889-1905, July.
    6. Mahmoudi, Parvin & MacDonald, Darla Hatton & Crossman, Neville D. & Summers, David M. & van der Hoek, John, 2013. "Space matters: the importance of amenity in planning metropolitan growth," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), March.
    7. Waltert, Fabian & Schläpfer, Felix, 2010. "Landscape amenities and local development: A review of migration, regional economic and hedonic pricing studies," Ecological Economics, Elsevier, vol. 70(2), pages 141-152, December.

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