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Measuring the social value of local public goods: an empirical analysis within Paris metropolitan area


  • Nicolas Gravel
  • Alessandra Michelangeli
  • Alain Trannoy


A non-linear hedonic model is used to estimate the implicit marginal prices of 17 local public goods in a Paris suburban area on an original data set of some 8200 housing units. The results reveal a robust effect of local public school quality (measured both by the fraction of junior high school students that are at least two years behind grade level and the student/teacher ratio) on house prices. It is observed that housing owners' marginal willingness to pay for reducing commuting time is roughly similar for public transportation than for car transportation. Another noticeable result is the complete capitalization of local taxes at a discount rate of 3.5%. An illustration of the potential usefulness of the results for Cost-Benefit analysis is also provided.

Suggested Citation

  • Nicolas Gravel & Alessandra Michelangeli & Alain Trannoy, 2006. "Measuring the social value of local public goods: an empirical analysis within Paris metropolitan area," Applied Economics, Taylor & Francis Journals, vol. 38(16), pages 1945-1961.
  • Handle: RePEc:taf:applec:v:38:y:2006:i:16:p:1945-1961
    DOI: 10.1080/00036840500427213

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    References listed on IDEAS

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    Cited by:

    1. Shanaka Herath & Johanna Choumert & Gunther Maier, 2015. "The value of the greenbelt in Vienna: a spatial hedonic analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 349-374, March.
    2. Fack, Gabrielle & Grenet, Julien, 2010. "When do better schools raise housing prices? Evidence from Paris public and private schools," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 59-77, February.
    3. Johanna Choumert & N. Eric Kéré & Amandine Loyal Laré-Dondarini, 2016. "A Multi-Level Housing Hedonic Analysis of Water and Sanitation Access," Economics Bulletin, AccessEcon, vol. 36(2), pages 1010-1037.
    4. Pierre-Alexandre Mahieu & Romain Craste & Bengt Kriström & Pere Riera, 2014. "Non-market valuation in France: An overview of the research activity," Working Papers hal-01087365, HAL.
    5. Riccardo, Borgoni & Alessandra, Michelangeli & Nicola, Pontarollo, 2016. "How Does a City Benefit from Culture? Evidence from Milan," Working Papers 335, University of Milano-Bicocca, Department of Economics, revised 16 May 2016.
    6. Gjestland, Arnstein & McArthur, David Philip & Osland, Liv & Thorsen, Inge, 2014. "The suitability of hedonic models for cost-benefit analysis: Evidence from commuting flows," Transportation Research Part A: Policy and Practice, Elsevier, vol. 61(C), pages 136-151.
    7. Papon, Francis & Nguyen-Luong, Dany & Boucq, Elise, 2015. "Should any new light rail line provide real estate gains, or not? The case of the T3 line in Paris," Research in Transportation Economics, Elsevier, vol. 49(C), pages 43-54.
    8. Nguyen-Hoang, Phuong & Yinger, John, 2011. "The capitalization of school quality into house values: A review," Journal of Housing Economics, Elsevier, vol. 20(1), pages 30-48, March.
    9. repec:crs:ecosta:es381-382e is not listed on IDEAS
    10. Boucq, Elise & Papon, Francis, 2008. "Assessment of the real estate benefits due to accessibility gains brought by a transport project: the impacts of a light rail infrastructure improvement in the Hauts-de-Seine department," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 40, pages 51-68.
    11. Arnstein Gjestland & David McArthur & Liv Osland & Inge Thorsen, 2011. "Alternative methods for quantifying commuting-related benefits of new transport infrastructure," ERSA conference papers ersa11p1223, European Regional Science Association.
    12. Jean Cavailhès, 2005. "Le prix des attributs du logement," Économie et Statistique, Programme National Persée, vol. 381(1), pages 91-123.
    13. François Geerolf & Thomas Grjebine, 2014. "Assessing House Price Effects on Unemployment Dynamics," Working Papers 2014-25, CEPII research center.

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