IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i16p6304-d394844.html
   My bibliography  Save this article

Urban Real Estate Values and Ecosystem Disservices: An Estimate Model Based on Regression Analysis

Author

Listed:
  • Antonio Nesticò

    (Department of Civil Engineering, University of Salerno, Via Giovanni Paolo II, 132-84084 Fisciano (SA), Italy)

  • Marianna La Marca

    (Department of Civil Engineering, University of Salerno, Via Giovanni Paolo II, 132-84084 Fisciano (SA), Italy)

Abstract

It is well known that production activities are often the cause of ecosystem disservices. Such disservices can have serious effects on urban real estate values. But how much is the contraction that the market values of housing suffer due to the polluting emissions produced by a medium-sized foundry? And how large is the urban area within which buildings are depreciated? With this research we intend to give an answer. To this aim, with specific regard to urban apartments free from contractual constraints, the use of multiple regression analysis makes it possible to obtain a function that explains the real estate value through multiple variables, one of which is representative of the ecosystem disservice. The study reveals that the urban area that suffers from the negative effects of polluting industrial activities on property prices can be extensive. On the other hand, the contractions of real estate values can even reach 43%. These results, for the first time expressed in quantitative terms, must direct towards urban planning interventions, and more generally of economic policy, aimed at minimizing the environmental impacts of production activities. This is not only for the essential obligations to protect environment and human health, but also in relation to the direct economic implications of the decrease in the value of real estate.

Suggested Citation

  • Antonio Nesticò & Marianna La Marca, 2020. "Urban Real Estate Values and Ecosystem Disservices: An Estimate Model Based on Regression Analysis," Sustainability, MDPI, vol. 12(16), pages 1-15, August.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:16:p:6304-:d:394844
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/16/6304/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/16/6304/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. de Groot, Rudolf S. & Wilson, Matthew A. & Boumans, Roelof M. J., 2002. "A typology for the classification, description and valuation of ecosystem functions, goods and services," Ecological Economics, Elsevier, vol. 41(3), pages 393-408, June.
    2. Hyung-Gun Kim & Kwong-Chin Hung & Sung Park, 2015. "Determinants of Housing Prices in Hong Kong: A Box-Cox Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 50(2), pages 270-287, February.
    3. Antonio Nesticò & Maria Rosaria Guarini & Pierluigi Morano & Francesco Sica, 2019. "An Economic Analysis Algorithm for Urban Forestry Projects," Sustainability, MDPI, vol. 11(2), pages 1-13, January.
    4. Smith, Barton A., 1978. "Measuring the value of urban amenities," Journal of Urban Economics, Elsevier, vol. 5(3), pages 370-387, July.
    5. Veronika Liebelt & Stephan Bartke & Nina Schwarz, 2019. "Urban Green Spaces and Housing Prices: An Alternative Perspective," Sustainability, MDPI, vol. 11(13), pages 1-21, July.
    6. Donald R. Epley & William Burns, 1978. "The Correct use of Confidence Intervals and Regression Analysis in Determining the Value of Residential Homes," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 6(1), pages 70-85, March.
    7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    8. Sofie R. Waltl, 2019. "Variation Across Price Segments and Locations: A Comprehensive Quantile Regression Analysis of the Sydney Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 47(3), pages 723-756, September.
    9. Tsong‐Yue Lai & Ko Wang, 1996. "Comparing the Accuracy of the Minimum‐Variance Grid Method to Multiple Regression in Appraised Value Estimates," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 24(4), pages 531-549, December.
    10. Jeffrey P. Cohen & Cletus C. Coughlin & John M. Clapp, 2017. "Local Polynomial Regressions versus OLS for Generating Location Value Estimates," The Journal of Real Estate Finance and Economics, Springer, vol. 54(3), pages 365-385, April.
    11. Farber, Stephen C. & Costanza, Robert & Wilson, Matthew A., 2002. "Economic and ecological concepts for valuing ecosystem services," Ecological Economics, Elsevier, vol. 41(3), pages 375-392, June.
    12. Joachim Zietz & Emily Zietz & G. Sirmans, 2008. "Determinants of House Prices: A Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 37(4), pages 317-333, November.
    13. Witte, Ann D & Sumka, Howard J & Erekson, Homer, 1979. "An Estimate of a Structural Hedonic Price Model of the Housing Market: An Application of Rosen's Theory of Implicit Markets," Econometrica, Econometric Society, vol. 47(5), pages 1151-1173, September.
    14. Massimiliano Bencardino & Antonio Nesticò, 2017. "Demographic Changes and Real Estate Values. A Quantitative Model for Analyzing the Urban-Rural Linkages," Sustainability, MDPI, vol. 9(4), pages 1-14, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alan T. K. Wan & Shangyu Xie & Yong Zhou, 2017. "A varying coefficient approach to estimating hedonic housing price functions and their quantiles," Journal of Applied Statistics, Taylor & Francis Journals, vol. 44(11), pages 1979-1999, August.
    2. Mats Wilhelmsson, 2019. "Energy Performance Certificates and Its Capitalization in Housing Values in Sweden," Sustainability, MDPI, vol. 11(21), pages 1-16, November.
    3. Ismail, Muhammad & Warsame, Abukar & Wilhelmsson, Mats, 2020. "Measuring Gentrification with Getis-Ord Statistics and Its Effect on Housing Prices in Neighboring Areas: The Case of Stockholm," Working Paper Series 20/19, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    4. Ming Li & Guojun Zhang & Yunliang Chen & Chunshan Zhou, 2019. "Evaluation of Residential Housing Prices on the Internet: Data Pitfalls," Complexity, Hindawi, vol. 2019, pages 1-15, February.
    5. Brasington, D. M., 2003. "The supply of public school quality," Economics of Education Review, Elsevier, vol. 22(4), pages 367-377, August.
    6. Trojanek, Radoslaw & Huderek-Glapska, Sonia, 2018. "Measuring the noise cost of aviation – The association between the Limited Use Area around Warsaw Chopin Airport and property values," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 103-114.
    7. Hackbart, Vivian C.S. & de Lima, Guilherme T.N.P. & dos Santos, Rozely F., 2017. "Theory and practice of water ecosystem services valuation: Where are we going?," Ecosystem Services, Elsevier, vol. 23(C), pages 218-227.
    8. Celia Bilbao-Terol, 2009. "Impacts of an Iron and Steel Plant on Residential Property Values," European Planning Studies, Taylor & Francis Journals, vol. 17(9), pages 1421-1436, September.
    9. Shunfeng Song, 1998. "Home buyers' characteristics and selling prices," Applied Economics Letters, Taylor & Francis Journals, vol. 5(1), pages 11-14.
    10. Raul-Tomas Mora-Garcia & Maria-Francisca Cespedes-Lopez & V. Raul Perez-Sanchez & Pablo Marti & Juan-Carlos Perez-Sanchez, 2019. "Determinants of the Price of Housing in the Province of Alicante (Spain): Analysis Using Quantile Regression," Sustainability, MDPI, vol. 11(2), pages 1-33, January.
    11. Alamanos, Angelos & Koundouri, Phoebe, 2022. "Economics of Incorporating Ecosystem Services into Water Resource Planning and Management," MPRA Paper 122046, University Library of Munich, Germany.
    12. Schmidt, Katja & Walz, Ariane & Martín-López, Berta & Sachse, René, 2017. "Testing socio-cultural valuation methods of ecosystem services to explain land use preferences," Ecosystem Services, Elsevier, vol. 26(PA), pages 270-288.
    13. Sinden, John Alfred & Griffith, Garry, 2007. "Combining economic and ecological arguments to value the environmental gains from control of 35 weeds in Australia," Ecological Economics, Elsevier, vol. 61(2-3), pages 396-408, March.
    14. Brown, James N & Rosen, Harvey S, 1982. "On the Estimation of Structural Hedonic Price Models," Econometrica, Econometric Society, vol. 50(3), pages 765-768, May.
    15. Jose Torres-Pruñonosa & Pablo García-Estévez & Josep Maria Raya & Camilo Prado-Román, 2022. "How on Earth Did Spanish Banking Sell the Housing Stock?," SAGE Open, , vol. 12(1), pages 21582440221, March.
    16. Zheng, Xian & Peng, Wenwei & Hu, Mingzhi, 2020. "Airport noise and house prices: A quasi-experimental design study," Land Use Policy, Elsevier, vol. 90(C).
    17. Frank F. Limehouse & Peter C. Melvin & Robert E. McCormick, 2010. "The Demand for Environmental Quality: An Application of Hedonic Pricing in Golf," Journal of Sports Economics, , vol. 11(3), pages 261-286, June.
    18. Houdet, Joël & Trommetter, Michel & Weber, Jacques, 2012. "Understanding changes in business strategies regarding biodiversity and ecosystem services," Ecological Economics, Elsevier, vol. 73(C), pages 37-46.
    19. Fan, Fan & Henriksen, Christian Bugge & Porter, John, 2016. "Valuation of ecosystem services in organic cereal crop production systems with different management practices in relation to organic matter input," Ecosystem Services, Elsevier, vol. 22(PA), pages 117-127.
    20. Richardson, Robert B., 2011. "Ecosystem Services and Food Security: Economic Perspectives on Environmental Sustainability," Food Security International Development Working Papers 98782, Michigan State University, Department of Agricultural, Food, and Resource Economics.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:16:p:6304-:d:394844. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.