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Hedonic Housing Prices and Agricultural Pollution: An Empirical Investigation on Semiparametric Models

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  • Bontemps, Christophe
  • Simioni, Michel
  • Surry, Yves R.

Abstract

Many empirical studies challenged the parametric approach to estimate nonlinear house price models and to use instead nonparametric or semiparametric model specifications. In the area of environmental analysis using house price models, Stock (1991) and McMillen and Thorsen (2000) applied semi-parametric models to estimate the impact of hazardous wastes on house prices. Furthermore, estimating nonparametricaly house price models is gaining now additional momentum because Ekeland et al. (2002) provided a theoretical justification to use such an empirical approach to estimate hedonic price models. The objective of this paper is to assess the impact of agricultural pollution in a livestock intensive region of France using alternative non-parametric and semi-parametric hedonic price models. We propose a two stage estimation procedure were the first step is based on the partially linear model introduced by Robinson (1988). In the second step, once the parametric part of the model has been estimated on the house characteristics, we propose four specifications for the remaining functional form on the environmental variables. A parametric, a fully nonparametric, an additive, and a single index specifications are proposed and estimated using appropriate econometric procedures similar to those developed by Horowitz and Lee (2001), Iwata et al. (2000) and Robinson (1988). The performances of these models are examined, compared with respect to the benchmark nonparametric model and specification tests are proposed.

Suggested Citation

  • Bontemps, Christophe & Simioni, Michel & Surry, Yves R., 2005. "Hedonic Housing Prices and Agricultural Pollution: An Empirical Investigation on Semiparametric Models," 2005 Annual meeting, July 24-27, Providence, RI 19547, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea05:19547
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    References listed on IDEAS

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    1. Carlos Martins-Filho & Okmyung Bin, 2005. "Estimation of hedonic price functions via additive nonparametric regression," Empirical Economics, Springer, vol. 30(1), pages 93-114, January.
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    3. Patrick Bajari & Matthew E. Kahn, 2005. "Estimating Housing Demand With an Application to Explaining Racial Segregation in Cities," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 20-33, January.
    4. Gozalo, Pedro L. & Linton, Oliver B., 2001. "Testing additivity in generalized nonparametric regression models with estimated parameters," Journal of Econometrics, Elsevier, vol. 104(1), pages 1-48, August.
    5. Sudip Chattopadhyay, 1999. "Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market," Land Economics, University of Wisconsin Press, vol. 75(1), pages 22-38.
    6. Joseph A. Herriges & Silvia Secchik & JBruce A. Babcock, 2005. "Living with Hogs in Iowa: The Impact of Livestock Facilities on Rural Residential Property Values," Land Economics, University of Wisconsin Press, vol. 81(4).
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    8. Enno Mammen, "undated". "Comparing nonparametric versus parametric regression fits," Statistic und Oekonometrie 9205, Humboldt Universitaet Berlin.
    9. Yasushi Kondo & Myoung-jae Lee, 2003. "Hedonic price index estimation under mean-independence of time dummies from quality characteristics," Econometrics Journal, Royal Economic Society, vol. 6(1), pages 28-45, June.
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    14. Richard C. Ready & Charles W. Abdalla, 2005. "The Amenity and Disamenity Impacts of Agriculture: Estimates from a Hedonic Pricing Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 314-326.
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    Keywords

    Research Methods/ Statistical Methods;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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