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Does clean air matter in developing countries' megacities? A hedonic price analysis of the Jakarta housing market, Indonesia

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  • Yusuf, Arief Anshory
  • Resosudarmo, Budy P.

Abstract

Despite numerous hedonic studies on the value of clean air in developed countries, the lack of similar studies in less developed countries has raised the question as to whether clean air also matters in developing countries' megacities. As an attempt to fill this gap, we apply a hedonic property value analysis, the method commonly used to infer the value of clean air in developed countries, using the combination of data on housing rental prices and their characteristics from the Indonesian Family Life Survey, and data of the ambient level of six different pollutants in Jakarta, Indonesia. The result indicates that, in the cases of lead, total hydro carbon (THC), and SO2, air pollutants have a negative association with property value; i.e., housing rental price. The relationship is at 5% level of significance for lead and 10% level for THC and SO2. This paper estimates that per family value of clean air in Jakarta ranges from US$28 to US$85 per [mu]g/m3.

Suggested Citation

  • Yusuf, Arief Anshory & Resosudarmo, Budy P., 2009. "Does clean air matter in developing countries' megacities? A hedonic price analysis of the Jakarta housing market, Indonesia," Ecological Economics, Elsevier, vol. 68(5), pages 1398-1407, March.
  • Handle: RePEc:eee:ecolec:v:68:y:2009:i:5:p:1398-1407
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    Cited by:

    1. repec:eee:ecolec:v:137:y:2017:i:c:p:29-36 is not listed on IDEAS
    2. Mia Amalia & Budy P. Resosudarmo & Jeff Bennett, 2013. "The Consequences of Urban Air Pollution for Child Health: What does Self Reporting Data in the Jakarta Metropolitan Area Reveal?," Departmental Working Papers 2013-09, The Australian National University, Arndt-Corden Department of Economics.
    3. Richard Freeman & Wenquan Liang & Ran Song & Christopher Timmins, 2017. "Willingness to Pay for Clean Air in China," NBER Working Papers 24157, National Bureau of Economic Research, Inc.
    4. Nathalie Picard & Constantinos Antoniou, 2014. "Econometric Methods For Land Use Microsimulation," Working Papers hal-01092031, HAL.
    5. Gonzalez, Fidel & Leipnik, Mark & Mazumder, Diya, 2013. "How much are urban residents in Mexico willing to pay for cleaner air?," Environment and Development Economics, Cambridge University Press, vol. 18(03), pages 354-379, June.
    6. Jian Wang & Libing Chi & Xiaowei Hu & Hongfei Zhou, 2014. "Urban Traffic Congestion Pricing Model with the Consideration of Carbon Emissions Cost," Sustainability, MDPI, Open Access Journal, vol. 6(2), pages 1-16, February.
    7. Zhang, Xin & Zhang, Xiaobo & Chen, Xi, 2017. "Valuing Air Quality Using Happiness Data: The Case of China," Ecological Economics, Elsevier, vol. 137(C), pages 29-36.
    8. Mark P. Berkman & Kyle J. Hubbard & Timothy H. Savage, 2012. "The Adverse Impact of Particulate Matter on Property Values," International Real Estate Review, Asian Real Estate Society, vol. 15(2), pages 215-230.
    9. repec:eee:ecolec:v:146:y:2018:i:c:p:706-721 is not listed on IDEAS
    10. repec:eee:touman:v:40:y:2014:i:c:p:273-281 is not listed on IDEAS
    11. Lopamudra Chakraborti & David Ricardo Heres & Danae Hernández Cortés, 2016. "Are Land Values Related to Ambiet Air Pollution Levels? Hedonic Evidence from Mexico City," Working papers DTE 596, CIDE, División de Economía.

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