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House Values and Proximity to a Landfill: A Quantile Regression Framework

Listed author(s):
  • Mario du Preez

    ()

    (Department of Economics, Nelson Mandela Metropolitan University, Port Elizabeth, 6001, South Africa)

  • Mehmet Balcilar

    ()

    (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10, Turkey)

  • Aarifah Razak

    ()

    (Department of Economics, University of Pretoria)

  • Steven F. Koch

    ()

    (Department of Economics, University of Pretoria)

  • Rangan Gupta

    ()

    (Department of Economics, University of Pretoria)

This paper explores the quantile treatment effects of proximity to a landfill site on housing values in the Nelson Mandela Bay Metropole (NMBM), South Africa, extending the research by Du Preez and Lottering (2009) who found a negative relationship to exist between proximity to a landfill site and mean housing values. Quantile regression analysis is used to account for the different implicit price functions that ‘wealthier’ and ‘poorer’ representative agents face. The results corroborate the findings of Du Preez and Lottering (2009) and further identify the negative relationship to be most pronounced at the lowest and highest quantiles of the house values distribution. Specifically, house values increase by an average of ZAR19 or US$1.81 (0.2 percent) for every 100 meters further away from the landfill site. At the lowest quantile (5 percent) house values increase by only 0.11 percent with every 100 meters of distance from the landfill site while at the highest quantile (95 percent), house values increase by 0,21 percent. This clearly demonstrates that ‘wealthier’ representative agents stand to gain more by being situated further away from landfill sites than ‘poorer’ representative agents. The suitability of the quantile treatment approach is confirmed by way of the Koenker and Xiao (2002) Location- Scale-Shift test statistics.

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File URL: http://repec.economics.emu.edu.tr/RePEc/emu/wpaper/15-16.pdf
File Function: First version, 2014
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Paper provided by Eastern Mediterranean University, Department of Economics in its series Working Papers with number 15-16.

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Length: 22 pages
Date of creation: 2014
Handle: RePEc:emu:wpaper:15-16.pdf
Contact details of provider: Phone: 90 (392) 630-1291
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Web page: http://economics.emu.edu.tr/

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  1. Hite, Diane & Chern, Wen & Hitzhusen, Fred & Randall, Alan, 2001. "Property-Value Impacts of an Environmental Disamenity: The Case of Landfills," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 185-202, March-May.
  2. Diane Hite, 1998. "Information and Bargaining in Markets for Environmental Quality," Land Economics, University of Wisconsin Press, vol. 74(3), pages 303-316.
  3. Jong Seok Lim & Paul Missios, 2007. "Does size really matter? Landfill scale impacts on property values," Applied Economics Letters, Taylor & Francis Journals, vol. 14(10), pages 719-723.
  4. Richard C. Ready, 2010. "Do Landfills Always Depress Nearby Property Values?," Journal of Real Estate Research, American Real Estate Society, vol. 32(3), pages 321-340.
  5. Arthur C. Nelson & John Genereux & Michelle Genereux, 1992. "Price Effects of Landfills on House Values," Land Economics, University of Wisconsin Press, vol. 68(4), pages 359-365.
  6. Baker, Brian P., 1982. "Land Values Surrounding Waste Disposal Factilities," EB Series 184876, Cornell University, Department of Applied Economics and Management.
  7. Mark Thayer & Heidi Albers & Morteza Rahmatian, 1992. "The Benefits of Reducing Exposure to Waste Disposal Sites: A Hedonic Housing Value Approach," Journal of Real Estate Research, American Real Estate Society, vol. 7(3), pages 265-282.
  8. Joachim Zietz & Emily Zietz & G. Sirmans, 2008. "Determinants of House Prices: A Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 37(4), pages 317-333, November.
  9. Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30.
  10. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  11. Bouvier, Rachel A. & Halstead, John M. & Conway, Karen S. & Manalo, Alberto B., 2000. "The Effects of Landfills on Rural Residential Property Values: Some Empirical Evidence," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 30(2).
  12. 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..
  13. Linneman, Peter, 1981. "The demand for residence site characteristics," Journal of Urban Economics, Elsevier, vol. 9(2), pages 129-148, March.
  14. Roger Koenker & Zhijie Xiao, 2002. "Inference on the Quantile Regression Process," Econometrica, Econometric Society, vol. 70(4), pages 1583-1612, July.
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