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Valuing Environmental Quality: A Space‐Based Strategy

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  • John I. Carruthers
  • David E. Clark

Abstract

ABSTRACT This paper develops and applies a space‐based strategy for overcoming the general problem of deriving the implicit demand for nonmarket goods. It focuses specifically on evaluating one form of environmental quality, distance from Environmental Protection Agency designated environmental hazards, via the single‐family housing market in the Puget Sound region of Washington State. A spatial two‐stage hedonic price analysis is used to: (i) estimate the marginal implicit price of distance from air release sites, hazardous waste generators, hazardous waste handlers, superfund sites, and toxic release sites; and (ii) estimate a series of implicit demand functions describing the relationship between the price of distance and the quantity consumed. The analysis, which represents an important step forward in the valuation of environmental quality, reveals that the information needed to identify second‐stage demand functions is hidden right in plain sight—hanging in the aether of the regional housing market.

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  • John I. Carruthers & David E. Clark, 2010. "Valuing Environmental Quality: A Space‐Based Strategy," Journal of Regional Science, Wiley Blackwell, vol. 50(4), pages 801-832, October.
    • Handle: RePEc:bla:jregsc:v:50:y:2010:i:4:p:801-832
    DOI: 10.1111/j.1467-9787.2010.00662.x
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    3. Bauer, Thomas K. & Braun, Sebastian & Kvasnicka, Michael, 2013. "Distant Event, Local Effects? Fukushima and the German Housing Market," Ruhr Economic Papers 433, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Thomas K. Bauer & Sebastian Braun & Michael Kvasnicka, 2013. "Distant Event, Local Effects? Fukushima and the German Housing Market," Ruhr Economic Papers 0433, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Renaud Coulomb & Yanos Zylberberg, 2016. "Rare Events and Risk Perception: Evidence from Fukushima Accident," Department of Economics - Working Papers Series 2020, The University of Melbourne.
    6. Hanxue Wei & Lucien C. Wostenholme & John I. Carruthers, 2021. "Planning and Markets at Work: Seattle under Growth Management and Economic Pressure," Sustainability, MDPI, vol. 13(14), pages 1-18, July.
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    8. Millimet, Daniel L., 2013. "Environmental Federalism: A Survey of the Empirical Literature," IZA Discussion Papers 7831, Institute of Labor Economics (IZA).
    9. Miller, Harvey J. & Witlox, Frank & Tribby, Calvin P., 2013. "Developing context-sensitive livability indicators for transportation planning: a measurement framework," Journal of Transport Geography, Elsevier, vol. 26(C), pages 51-64.
    10. Mark D. Partridge & Dan S. Rickman, 2012. "Integrating Regional Economic Development Analysis and Land Use Economics," Economics Working Paper Series 1203, Oklahoma State University, Department of Economics and Legal Studies in Business.
    11. Aaron Swoboda & Tsegaye Nega & Maxwell Timm, 2015. "Hedonic Analysis Over Time And Space: The Case Of House Prices And Traffic Noise," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 644-670, September.
    12. Anping Chen & Marlon Boarnet & Mark Partridge & Wenjie Wu & Guanpeng Dong, 2014. "Valuing The “Green” Amenities In A Spatial Context," Journal of Regional Science, Wiley Blackwell, vol. 54(4), pages 569-585, September.
    13. Karima Kourtit & Peter Nijkamp & Mark D. Partridge & Marlon G. Boarnet, 2013. "The declining role of the automobile and the re-emergence of place in urban transportation: The past will be prologue," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(2), pages 237-253, June.
    14. Joseph Hiebert & Karen Allen, 2019. "Valuing Environmental Amenities across Space: A Geographically Weighted Regression of Housing Preferences in Greenville County, SC," Land, MDPI, vol. 8(10), pages 1-16, October.
    15. Heather M. Stephens & Mark D. Partridge, 2015. "Lake Amenities, Environmental Degradation, and Great Lakes Regional Growth," International Regional Science Review, , vol. 38(1), pages 61-91, January.
    16. Myung-Jin Jun, 2018. "Quantifying Welfare Impacts of Air Pollution in Seoul: A Two-Stage Hedonic Price Approach," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-25, June.
    17. Bauer, Thomas K. & Braun, Sebastian T. & Kvasnicka, Michael, 2017. "Nuclear power plant closures and local housing values: Evidence from Fukushima and the German housing market," Journal of Urban Economics, Elsevier, vol. 99(C), pages 94-106.
    18. Jeffrey P. Cohen & Robert G. Cromley & Kevin T. Banach, 2015. "Are Homes Near Water Bodies and Wetlands Worth More or Less? An Analysis of Housing Prices in One Connecticut Town," Growth and Change, Wiley Blackwell, vol. 46(1), pages 114-132, March.
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    More about this item

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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