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Improving Land Compensation Procedures via Gis and Hedonic Pricing

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  • Iain R Lake
  • Andrew A Lovett
  • Ian J Bateman
  • Brett H Day

Abstract

One of the results of new road construction is often a reduction in the price of nearby properties. In the United Kingdom property owners can be compensated for this loss through the Land Compensation Act. The appropriate level of compensation is currently determined by valuers and is mainly based upon their expertise and skill. This study aims to determine what the correct level of compensation should be. It has been specifically designed to fulfil the requirements of current legislation and can be integrated into existing compensation procedures. This was achieved through a hedonic pricing study that relates current property prices to a wide range of factors. These variables include the structure, neighbourhood, accessibility, and environment of the property, in addition to the impact of nearby roads. These were all created through GIS and large-scale digital data. The study, which is based on over 3500 property sales in Glasgow, Scotland, suggests that property prices were depressed by 0.202% for each decibel increase in road noise. This result has enabled a more streamlined compensation procedure to be developed and demonstrates that compensation claims can be estimated at the road-development stage. This would allow any compensation claims to be assessed prior to road construction and inform the design of noise-reduction measures.

Suggested Citation

  • Iain R Lake & Andrew A Lovett & Ian J Bateman & Brett H Day, 2000. "Improving Land Compensation Procedures via Gis and Hedonic Pricing," Environment and Planning C, , vol. 18(6), pages 681-696, December.
    • Handle: RePEc:sae:envirc:v:18:y:2000:i:6:p:681-696
    DOI: 10.1068/c9911j
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    References listed on IDEAS

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    2. 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(1), pages 1-10, July.
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    1. Julii S. Brainard & Andrew P. Jones & Ian J. Bateman, 2006. "Exposure to Environmental Urban Noise Pollution in Birmingham, UK," Chapters, in: Ysé Serret & Nick Johnstone (ed.), The Distributional Effects of Environmental Policy, chapter 6, Edward Elgar Publishing.
    2. Cho, Seong-Hoon & Newman, David H., 2005. "Spatial analysis of rural land development," Forest Policy and Economics, Elsevier, vol. 7(5), pages 732-744, August.
    3. Contreras, Víctor & Garay, Urbi & Santos, Miguel Angel & Betancourt, Cosme, 2014. "Expropriation risk and housing prices: Evidence from an emerging market," Journal of Business Research, Elsevier, vol. 67(5), pages 935-942.
    4. Cho, Seong-Hoon & Newman, David H. & Wear, David N., 2003. "Community Choices And Housing Decisions: A Spatial Analysis Of The Southern Appalachian Highlands," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35209, Southern Agricultural Economics Association.
    5. Sotirios Thanos & Abigail L. Bristow & Mark R. Wardman, 2015. "Residential Sorting And Environmental Externalities: The Case Of Nonlinearities And Stigma In Aviation Noise Values," Journal of Regional Science, Wiley Blackwell, vol. 55(3), pages 468-490, June.

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