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The Demand for Local Amenity: An Hedonic Price Analysis

Author

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  • P B McLeod

    (Department of Economics, University of Western Australia, Nedlands, Perth, Western Australia 6009)

Abstract

In this paper the author investigates the demand for housing characteristics and proximity to local amenities in Perth, Western Australia. By application of hedonic price theory to a sample of house transactions the implicit prices for individual characteristics are estimated and used to estimate inverse demand curves for these characteristics in a second stage analysis. The results confirm the importance of proximity of river, parks, and highways in determining house prices. River views are found to be particularly important being valued at 28% of average selling price. From the inverse demand curves income elasticities of willingness to pay are found to range from 1.0 for age of house to 0.43 for proximity to the river.

Suggested Citation

  • P B McLeod, 1984. "The Demand for Local Amenity: An Hedonic Price Analysis," Environment and Planning A, , vol. 16(3), pages 389-400, March.
    • Handle: RePEc:sae:envira:v:16:y:1984:i:3:p:389-400
    DOI: 10.1068/a160389
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    References listed on IDEAS

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    1. Mark R. Correll & Jane H. Lillydahl & Larry D. Singell, 1978. "The Effects of Greenbelts on Residential Property Values: Some Findings on the Political Economy of Open Space," Land Economics, University of Wisconsin Press, vol. 54(2), pages 207-217.
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    3. 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.
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    5. Nelson, Jon P., 1978. "Residential choice, hedonic prices, and the demand for urban air quality," Journal of Urban Economics, Elsevier, vol. 5(3), pages 357-369, July.
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    Cited by:

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    2. Youjung Kim & Galen Newman, 2019. "Climate Change Preparedness: Comparing Future Urban Growth and Flood Risk in Amsterdam and Houston," Sustainability, MDPI, vol. 11(4), pages 1-24, February.
    3. Robert W. Paterson & Kevin J. Boyle, 2002. "Out of Sight, Out of Mind? Using GIS to Incorporate Visibility in Hedonic Property Value Models," Land Economics, University of Wisconsin Press, vol. 78(3), pages 417-425.
    4. Luca D’Acci, 2014. "Monetary, Subjective and Quantitative Approaches to Assess Urban Quality of Life and Pleasantness in Cities (Hedonic Price, Willingness-to-Pay, Positional Value, Life Satisfaction, Isobenefit Lines)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 115(2), pages 531-559, January.
    5. Liu, Sezhu & Hite, Diane, 2013. "Measuring the Effect of Green Space on Property Value: An Application of the Hedonic Spatial Quantile Regression," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143045, Southern Agricultural Economics Association.
    6. Shaw, John Gordon, 1994. "Transit, Density, and Residential Satisfaction," University of California Transportation Center, Working Papers qt8xk3c9z7, University of California Transportation Center.
    7. Shaw, John G., 1994. "Transit, Density, and Residential Satisfaction," University of California Transportation Center, Working Papers qt5xs0r6vz, University of California Transportation Center.
    8. P.B. McLeod, 1985. "The Demand for Housing and Amenity Attributes: An empirical analysis of the Perth housing market," Economics Discussion / Working Papers 85-04, The University of Western Australia, Department of Economics.
    9. Claudio Othón Cruz Martínez, 2016. "Una aproximación al valor social y ambiental de las áreas verdes urbanas de la Ciudad de México," Graduate theses (Spanish) TESG 011, CIDE, División de Economía.
    10. Cervero, Robert & Bosselmann, Peter, 1994. "An Evaluation of the Market Potential for Transit-Oriented Development Using Visual Simulation Techniques," University of California Transportation Center, Working Papers qt8qf9116b, University of California Transportation Center.
    11. Ambrey, Christopher L. & Fleming, Christopher M., 2011. "Valuing scenic amenity using life satisfaction data," Ecological Economics, Elsevier, vol. 72(C), pages 106-115.
    12. Erda Wang & Nannan Kang & Yang Yu, 2017. "Valuing Urban Landscape Using Subjective Well-Being Data: Empirical Evidence from Dalian, China," Sustainability, MDPI, vol. 10(1), pages 1-20, December.
    13. Lake, Mary Beth & Easter, K. William, 2002. "Hedonic Valuation Of Proximity To Natural Areas And Farmland In Dakota County, Minnesota," Staff Papers 13407, University of Minnesota, Department of Applied Economics.

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