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Spatial Variations in Amenity Values: New Evidence from Beijing, China

  • Wenjie Wu
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    Using parks as an example, this paper explores the robustness and sources of spatial variation in the estimated amenity values using an extended geographically weighted regression (GWR) technique. This analysis, illustrated with estimates using geo-coded data from Beijing's residential land market, has three important implications. First, it provides a powerful estimation strategy to evaluate how sensitive GWR parameters are to unobserved amenities and complementarities between amenities. Second, it compares the spatial variation patterns for the marginal prices of proximity to parks, estimated using a range of GWR model specifications. The answers generated using the GWR approach still reveal a significant underlying problem of omitted variables. Finally, it highlights the importance of conceptualizing amenity values not just in terms of their structural characteristics but how those characteristics interact with or are conditioned by local social, economic, and other contextual characteristics.

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    File URL: http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0113.pdf
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    Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0113.

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    Date of creation: Jun 2012
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    Handle: RePEc:cep:sercdp:0113
    Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

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    1. Cho, Seong-Hoon & Bowker, James Michael & Park, William M., 2006. "Measuring the Contribution of Water and Green Space Amenities to Housing Values: An Application and Comparison of Spatially Weighted Hedonic Models," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(03), December.
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    3. Anderson, Soren T. & West, Sarah E., 2006. "Open space, residential property values, and spatial context," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 773-789, November.
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    7. Pace, R Kelley & Barry, Ronald & Sirmans, C F, 1998. "Spatial Statistics and Real Estate," The Journal of Real Estate Finance and Economics, Springer, vol. 17(1), pages 5-13, July.
    8. Tadao Hoshino & Koichi Kuriyama, 2010. "Measuring the Benefits of Neighbourhood Park Amenities: Application and Comparison of Spatial Hedonic Approaches," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(3), pages 429-444, March.
    9. Stephen Gibbons & Susana Mourato & Guilherme Resende, 2014. "The Amenity Value of English Nature: A Hedonic Price Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(2), pages 175-196, February.
    10. Elena G. Irwin & Nancy E. Bockstael, 2001. "The Problem of Identifying Land Use Spillovers: Measuring the Effects of Open Space on Residential Property Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 698-704.
    11. Bertaud, Alain & Renaud, Bertrand, 1997. "Socialist Cities without Land Markets," Journal of Urban Economics, Elsevier, vol. 41(1), pages 137-151, January.
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    13. Zheng, Siqi & Kahn, Matthew E., 2008. "Land and residential property markets in a booming economy: New evidence from Beijing," Journal of Urban Economics, Elsevier, vol. 63(2), pages 743-757, March.
    14. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press, vol. 24(1), pages 99-119, spring.
    15. Timothy J. Fik & David C. Ling & Gordon F. Mulligan, 2003. "Modeling Spatial Variation in Housing Prices: A Variable Interaction Approach," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(4), pages 623-646, December.
    16. Allen Klaiber, H. & Phaneuf, Daniel J., 2010. "Valuing open space in a residential sorting model of the Twin Cities," Journal of Environmental Economics and Management, Elsevier, vol. 60(2), pages 57-77, September.
    17. Bowes, David R. & Ihlanfeldt, Keith R., 2001. "Identifying the Impacts of Rail Transit Stations on Residential Property Values," Journal of Urban Economics, Elsevier, vol. 50(1), pages 1-25, July.
    18. Steven Farber & Antonio Páez, 2007. "A systematic investigation of cross-validation in GWR model estimation: empirical analysis and Monte Carlo simulations," Journal of Geographical Systems, Springer, vol. 9(4), pages 371-396, December.
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