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Using Contingent-Pricing Analysis to Value Open Space and Its Duration at Residential Locations

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  • Dietrich Earnhart

Abstract

To estimate benefits from open space adjacent to residences, this paper blends contingent valuation and conjoint analysis within a housing market context. The resulting framework — "contingent-pricing analysis," — represents the stated preference counterpart to hedonic-pricing analysis by asking individuals to state prices for hypothetical housing locations, which include an environmental amenity. Then, it asks individuals to state their willingness to pay for a better and longer lasting environmental amenity. As an advantage over hedonic-pricing analysis, it directly isolates willingness to pay. Results indicate that potentially short-lasting open space adds no value, while preserved open space adds $ 5,066 or 5% to housing value.

Suggested Citation

  • Dietrich Earnhart, 2006. "Using Contingent-Pricing Analysis to Value Open Space and Its Duration at Residential Locations," Land Economics, University of Wisconsin Press, vol. 82(1), pages 17-35.
  • Handle: RePEc:uwp:landec:v:82:y:2006:i:1:p:17-35
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    References listed on IDEAS

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    1. Shultz, Steven D & King, David A, 2001. "The Use of Census Data for Hedonic Price Estimates of Open-Space Amenities and Land Use," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 239-252, March-May.
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    5. Dietrich Earnhart, 2001. "Combining Revealed and Stated Preference Methods to Value Environmental Amenities at Residential Locations," Land Economics, University of Wisconsin Press, vol. 77(1), pages 12-29.
    6. Lansford, Notie H., Jr. & Jones, Lonnie L., 1995. "Marginal Price Of Lake Recreation And Aesthetics: An Hedonic Approach," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(01), July.
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    8. Phil Graves & James C. Murdoch & Mark A. Thayer & Don Waldman, 1988. "The Robustness of Hedonic Price Estimation: Urban Air Quality," Land Economics, University of Wisconsin Press, vol. 64(3), pages 220-233.
    9. Smith, V. Kerry & Poulos, Christine & Kim, Hyun, 2002. "Treating open space as an urban amenity," Resource and Energy Economics, Elsevier, vol. 24(1-2), pages 107-129, February.
    10. Loomis, John B. & Traynor, Kerri & Brown, Thomas C., 1999. "Trichotomous Choice: A Possible Solution To Dual Response Objectives In Dichotomous Choice Contingent Valuation Questions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
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    Cited by:

    1. Donald, Vandegrift & Michael, Lahr, 2007. "Open Space Purchases, House Prices, and the Tax Base," MPRA Paper 6118, University Library of Munich, Germany.
    2. Sahan T. M. Dissanayake & Amy W. Ando, 2014. "Valuing Grassland Restoration: Proximity to Substitutes and Trade-offs among Conservation Attributes," Land Economics, University of Wisconsin Press, vol. 90(2), pages 237-259.
    3. Caruso, Geoffrey & Peeters, Dominique & Cavailhes, Jean & Rounsevell, Mark, 2007. "Spatial configurations in a periurban city. A cellular automata-based microeconomic model," Regional Science and Urban Economics, Elsevier, vol. 37(5), pages 542-567, September.
    4. Paul Asabere & Forrest Huffman, 2009. "The Relative Impacts of Trails and Greenbelts on Home Price," The Journal of Real Estate Finance and Economics, Springer, vol. 38(4), pages 408-419, May.
    5. Bark, R.H. & Osgood, D.E. & Colby, B.G. & Katz, G. & Stromberg, J., 2009. "Habitat preservation and restoration: Do homebuyers have preferences for quality habitat?," Ecological Economics, Elsevier, vol. 68(5), pages 1465-1475, March.
    6. Paul Asabere, 2014. "The Value of Homes in Cluster Development Residential Districts: The Relative Significance of the Permanent Open Spaces Associated with Clusters," The Journal of Real Estate Finance and Economics, Springer, vol. 48(2), pages 244-255, February.
    7. Fabian Waltert & Felix Schlaepfer, 2007. "The role of landscape amenities in regional development: a survey of migration, regional economic and hedonic pricing studies," SOI - Working Papers 0710, Socioeconomic Institute - University of Zurich.

    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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