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Intra-Regional Amenities, Wages, and Home Prices: The Role of Forests in the Southwest

Author

Listed:
  • Michael S. Hand
  • Jennifer A. Thacher
  • Daniel W. McCollum
  • Robert P. Berrens

Abstract

Forests provide non-market goods and services that people are implicitly willing to pay for through hedonic housing and labor markets. But it is unclear if compensating differentials arise in these markets at the regional level. This empirical question is addressed in a study of Arizona and New Mexico. Hedonic regressions of housing prices and wages using census and geographic data show that forest area carries an implicit price of between $27 and $36 per square mile annually. Compensating differentials at the regional level suggest that care must be taken when applying the travel cost method to value regionally delineated characteristics

Suggested Citation

  • Michael S. Hand & Jennifer A. Thacher & Daniel W. McCollum & Robert P. Berrens, 2008. "Intra-Regional Amenities, Wages, and Home Prices: The Role of Forests in the Southwest," Land Economics, University of Wisconsin Press, vol. 84(4), pages 635-651.
  • Handle: RePEc:uwp:landec:v:84:y:2008:i:4:p:635-651
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    References listed on IDEAS

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    1. Lucie Schmidt & Paul N. Courant, 2006. "Sometimes Close Is Good Enough: The Value Of Nearby Environmental Amenities," Journal of Regional Science, Wiley Blackwell, vol. 46(5), pages 931-951.
    2. Graves, Philip E. & Arthur, Michelle M. & Sexton, Robert L., 1999. "Amenities and the labor earnings function," MPRA Paper 19911, University Library of Munich, Germany.
    3. Dora L. Costa & Matthew E. Kahn, 2003. "The Rising Price of Nonmarket Goods," American Economic Review, American Economic Association, vol. 93(2), pages 227-232, May.
    4. Acharya, Gayatri & Bennett, Lynne Lewis, 2001. "Valuing Open Space and Land-Use Patterns in Urban Watersheds," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 221-237, March-May.
    5. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-1043, September.
    6. Gawande, Kishore & Bohara, Alok K. & Berrens, Robert P. & Wang, Pingo, 2000. "Internal migration and the environmental Kuznets curve for US hazardous waste sites," Ecological Economics, Elsevier, vol. 33(1), pages 151-166, April.
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    Citations

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    Cited by:

    1. Charlotte Ham & John B. Loomis & Patricia A. Champ, 2015. "Relative Economic Values of Open Space Provided by National Forest and Military Lands to Surrounding Communities," Growth and Change, Wiley Blackwell, vol. 46(1), pages 81-96, March.
    2. Mani Nepal, "undated". "Where gathering firewood matters: Proximity and forest management effects in hedonic pricing models for rural Nepal," Working papers 113, The South Asian Network for Development and Environmental Economics.
    3. repec:bla:growch:v:47:y:2016:i:4:p:461-480 is not listed on IDEAS
    4. Germán M. Izãn & Michael S. Hand & Matias Fontenla & Robert P. Berrens, 2010. "The Economic Value Of Protecting Inventoried Roadless Areas: A Spatial Hedonic Price Study In New Mexico," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 537-553, October.
    5. David A. McGranahan & Timothy R. Wojan & Dayton M. Lambert, 2011. "The rural growth trifecta: outdoor amenities, creative class and entrepreneurial context -super-§," Journal of Economic Geography, Oxford University Press, vol. 11(3), pages 529-557, May.
    6. Charlotte Ham & Patricia A. Champ & John B. Loomis & Robin M. Reich, 2012. "Accounting for Heterogeneity of Public Lands in Hedonic Property Models," Land Economics, University of Wisconsin Press, vol. 88(3), pages 444-456.
    7. Abildtrup, Jens & Garcia, Serge & Olsen, Søren Bøye & Stenger, Anne, 2013. "Spatial preference heterogeneity in forest recreation," Ecological Economics, Elsevier, vol. 92(C), pages 67-77.
    8. Koirala, Bishwa S. & Bohara, Alok K. & Berrens, Robert P., 2014. "Estimating the net implicit price of energy efficient building codes on U.S. households," Energy Policy, Elsevier, vol. 73(C), pages 667-675.
    9. Hand, Michael S. & Thacher, Jennifer A. & McCollum, Daniel W. & Berrens, Robert P., 2008. "Forest Amenities and Location Choice in the Southwest," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(2), August.
    10. Price, James I. & McCollum, Daniel W. & Berrens, Robert P., 2010. "Insect infestation and residential property values: A hedonic analysis of the mountain pine beetle epidemic," Forest Policy and Economics, Elsevier, vol. 12(6), pages 415-422, July.
    11. Waltert, Fabian & Schläpfer, Felix, 2010. "Landscape amenities and local development: A review of migration, regional economic and hedonic pricing studies," Ecological Economics, Elsevier, vol. 70(2), pages 141-152, December.
    12. Joshi, Janak & Ali, Mohammad & Berrens, Robert P., 2017. "Valuing farm access to irrigation in Nepal: A hedonic pricing model," Agricultural Water Management, Elsevier, vol. 181(C), pages 35-46.

    More about this item

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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