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The value of the greenbelt in Vienna: a spatial hedonic analysis

  • Shanaka HERATH

    ()

  • Gunther MAIER

    ()

  • Johanna CHOUMERT

    ()

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

This paper employs the hedonic price method (HPM) to examine whether the implicit value of the greenbelt is capitalized into apartment prices in the city of Vienna, Austria. We improve the traditional model using spatial econometric techniques and compare estimates from different spatial models, namely the spatial lag model (SAR), the spatial error model (SEM) and the spatial Durbin model (SDM). While our use of spatial models addresses the common problem of omitted variable bias, the SDM specifically allows for controlling possible nearby proximity effects (i.e., small-scale neighbourhood) that are rarely included in this type of analyses. Findings indicate that distance from the greenbelt is important in explaining apartment prices in Vienna: while the CBD exerts a centripetal force, the greenbelt, on the contrary, exerts a centrifugal force. The SDM is found to be the best performing model indicating existence of small-scale neighbourhood effects and presenting a solid case for consideration of this model in valuation of green amenities.

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Paper provided by CERDI in its series Working Papers with number 201402.

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Length: 35
Date of creation: 2014
Date of revision:
Publication status: Published in Annals of Regional Science, 2015, pages 349-374
Handle: RePEc:cdi:wpaper:1526
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  1. Nick Hanley & Jacqui Knight, 1992. "Valuing the Environment: Recent UK Experience and an Application to Green Belt Land," Working Papers Series 92/11, University of Stirling, Division of Economics.
  2. Bastian, Chris T. & McLeod, Donald M. & Germino, Matthew J. & Reiners, William A. & Blasko, Benedict J., 2002. "Environmental amenities and agricultural land values: a hedonic model using geographic information systems data," Ecological Economics, Elsevier, vol. 40(3), pages 337-349, March.
  3. Anselin, Luc, 2002. "Under the hood Issues in the specification and interpretation of spatial regression models," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 27(3), November.
  4. Tyrvainen, Liisa & Miettinen, Antti, 2000. "Property Prices and Urban Forest Amenities," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 205-223, March.
  5. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  6. Robert W. Paterson & Kevin J. Boyle, 2002. "Out of Sight, Out of Mind? Using GIS to Incorporate Visibility in Hedonic Property Value Models," Land Economics, University of Wisconsin Press, vol. 78(3), pages 417-425.
  7. Mark R. Correll & Jane H. Lillydahl & Larry D. Singell, 1978. "The Effects of Greenbelts on Residential Property Values: Some Findings on the Political Economy of Open Space," Land Economics, University of Wisconsin Press, vol. 54(2), pages 207-217.
  8. Corrado, L. & Fingleton, B., 2011. "Where is the economics in spatial econometrics?," SIRE Discussion Papers 2011-02, Scottish Institute for Research in Economics (SIRE).
  9. Catherine Baumont & Diego Legros, 2009. "Neighborhood Effects In Spatial Housing Value Models. The Case Of The Metropolitan Area Of Paris (1999)," Working Papers halshs-00579747, HAL.
  10. Zhang, Lingxian & Liu, Qing & Hall, Nigel W. & Fu, Zetian, 2007. "An environmental accounting framework applied to green space ecosystem planning for small towns in China as a case study," Ecological Economics, Elsevier, vol. 60(3), pages 533-542, January.
  11. Chang-Moo Lee & Peter Linneman, 1998. "Dynamics of the Greenbelt Amenity Effect on the Land Market-The Case of Seoul's Greenbelt," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(1), pages 107-129.
  12. Philippe Le Goffe, 2000. "Hedonic Pricing of Agriculture and Forestry Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(4), pages 397-401, April.
  13. 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.
  14. Sjerp de Vries & Robert A Verheij & Peter P Groenewegen & Peter Spreeuwenberg, 2003. "Natural environments -- healthy environments? An exploratory analysis of the relationship between greenspace and health," Environment and Planning A, Pion Ltd, London, vol. 35(10), pages 1717-1731, October.
  15. Catherine Baumont, 2009. "Spatial effects of urban public policies on housing values," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 301-326, 06.
  16. Bolund, Per & Hunhammar, Sven, 1999. "Ecosystem services in urban areas," Ecological Economics, Elsevier, vol. 29(2), pages 293-301, May.
  17. Anselin, Luc, 2002. "Under the hood : Issues in the specification and interpretation of spatial regression models," Agricultural Economics, Blackwell, vol. 27(3), pages 247-267, November.
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