IDEAS home Printed from https://ideas.repec.org/p/emu/wpaper/15-16.pdf.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Mario du Preez & Mehmet Balcilar & Aarifah Razak & Steven F. Koch & Rangan Gupta, 2014. "House Values and Proximity to a Landfill: A Quantile Regression Framework," Working Papers 15-16, Eastern Mediterranean University, Department of Economics.
  • Handle: RePEc:emu:wpaper:15-16.pdf
    as

    Download full text from publisher

    File URL: http://repec.economics.emu.edu.tr/RePEc/emu/wpaper/15-16.pdf
    File Function: First version, 2014
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Havlicek, Joseph & Richardson, Robert & Davies, Lloyd, 1971. "Measuring The Impacts Of Solid Waste Disposal Site Location On Property Values," 1971 Annual Meeting, August 15-18, Carbondale, Illinois 284441, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. 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.
    3. Diane Hite, 1998. "Information and Bargaining in Markets for Environmental Quality," Land Economics, University of Wisconsin Press, vol. 74(3), pages 303-316.
    4. 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.
    5. 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.
    6. 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.
    7. Baker, Brian P., 1982. "Land Values Surrounding Waste Disposal Factilities," EB Series 184876, Cornell University, Department of Applied Economics and Management.
    8. 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.
    9. 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.
    10. 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.
    11. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    12. 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), pages 1-15.
    13. 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..
    14. Linneman, Peter, 1981. "The demand for residence site characteristics," Journal of Urban Economics, Elsevier, vol. 9(2), pages 129-148, March.
    15. Roger Koenker & Zhijie Xiao, 2002. "Inference on the Quantile Regression Process," Econometrica, Econometric Society, vol. 70(4), pages 1583-1612, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ham, Yun-Ju & Maddison, David J. & Elliott, Robert J.R., 2013. "The valuation of landfill disamenities in Birmingham," Ecological Economics, Elsevier, vol. 85(C), pages 116-129.
    2. 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.
    3. David M. Brasington & Diane Hite, 2005. "Demand for Environmental Quality: A Spatial Hedonic Approach," Departmental Working Papers 2005-08, Department of Economics, Louisiana State University.
    4. Brasington, David M. & Hite, Diane, 2005. "Demand for environmental quality: a spatial hedonic analysis," Regional Science and Urban Economics, Elsevier, vol. 35(1), pages 57-82, January.
    5. John Braden & Xia Feng & DooHwan Won, 2011. "Waste Sites and Property Values: A Meta-Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 175-201, October.
    6. Giani Ionel Grădinaru & Ildiko Ioan, 2012. "Estimating the Impact of Landfill Proximity on the Value of Real Estate Goods," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(31), pages 38-49, February.
    7. Yoo, James & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J. & Kinzig, Ann P. & Perrings, Charles, 2013. "The value of agricultural water rights in agricultural properties in the path of development," Ecological Economics, Elsevier, vol. 91(C), pages 57-68.
    8. Liu, Sezhu & Hite, Diane, 2013. "Measuring the Effect of Green Space on Property Value: An Application of the Hedonic Spatial Quantile Regression," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143045, Southern Agricultural Economics Association.
    9. 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.
    10. Yoo, James & Perrings, Charles & Kinzig, Ann & Abbott, Joshua K. & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J., 2012. "The Value of Water Rights in Agricultural Properties in the Phoenix Active Management Area," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124095, Agricultural and Applied Economics Association.
    11. Nicodemo, Catia & Raya, Josep Maria, 2012. "Change in the distribution of house prices across Spanish cities," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 739-748.
    12. Andres Jauregui & Diane Hite, 2010. "The impact of real estate agents on house prices near environmental disamenities," Housing Policy Debate, Taylor & Francis Journals, vol. 20(2), pages 295-316, March.
    13. Thomas C. Kinnaman, 2009. "A Landfill Closure And Housing Values," Contemporary Economic Policy, Western Economic Association International, vol. 27(3), pages 380-389, July.
    14. Trojanek, Radoslaw & Huderek-Glapska, Sonia, 2018. "Measuring the noise cost of aviation – The association between the Limited Use Area around Warsaw Chopin Airport and property values," Journal of Air Transport Management, Elsevier, vol. 67(C), pages 103-114.
    15. Villar, Jaume García & Raya, Josep Maria, 2015. "Use of a Gini index to examine housing price heterogeneity: A quantile approach," Journal of Housing Economics, Elsevier, vol. 29(C), pages 59-71.
    16. Katherine Kiel, 2006. "Environmental Contamination and House Values," Working Papers 0601, College of the Holy Cross, Department of Economics.
    17. Irfan Muhammad, 2017. "Disamenity impact of Nala Lai (open sewer) on house rent in Rawalpindi city," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(1), pages 77-97, January.
    18. Nana Cui & Hengyu Gu & Tiyan Shen & Changchun Feng, 2018. "The Impact of Micro-Level Influencing Factors on Home Value: A Housing Price-Rent Comparison," Sustainability, MDPI, Open Access Journal, vol. 10(12), pages 1-23, November.
    19. Benoît Chèze, 2007. "Une méta-analyse des études d’évaluation monétaire par la méthode des prix hédoniques du coût externe des installations de traitement des déchets," EconomiX Working Papers 2007-23, University of Paris Nanterre, EconomiX.
    20. Bhattarai, Gandhi Raj & Pandit, Ram & Hite, Diane, 2004. "Willingness To Pay For Public Goods: A Hedonic Demand Model For Neighborhood Safety, School And Environmental Quality," 2004 Annual Meeting, February 14-18, 2004, Tulsa, Oklahoma 34628, Southern Agricultural Economics Association.

    More about this item

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:emu:wpaper:15-16.pdf. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mehmet Balcilar). General contact details of provider: https://edirc.repec.org/data/deemuty.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.