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The Impact of Hazardous Industrial Facilities on Housing Prices: A Comparison of Parametric and Semiparametric Hedonic Price Models

Author

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  • C. GRISLAIN-LETRÉMY

    (Insee)

  • A. KATOSSKY

    (Insee)

Abstract

Households willingness to pay for prevention against industrial risks can be revealed by real estate markets. With highly detailed microdata, we study housing prices in the vicinity of hazardous industries located near three important French cities (Bordeaux, Dunkirk and Rouen). We show that the impact of hazardous plants on housing values strongly differs among the three studied areas, even if they all surround chemical and petrochemical industries. We compare the results from standard parametric hedonic property models and from a more flexible, semiparametric hedonic property model. We show that the parametric model may structurally lead to an important bias in the estimated value of the impact of hazardous plants on housing values and in its variations with respect to distance to the plants.

Suggested Citation

  • C. Grislain-Letrémy & A. Katossky, 2014. "The Impact of Hazardous Industrial Facilities on Housing Prices: A Comparison of Parametric and Semiparametric Hedonic Price Models," Documents de Travail de l'Insee - INSEE Working Papers g2014-05, Institut National de la Statistique et des Etudes Economiques.
  • Handle: RePEc:nse:doctra:g2014-05
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    File URL: https://www.insee.fr/fr/statistiques/fichier/1381069/G2014-05bis.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Grislain-Letrémy, Céline & Villeneuve, Bertrand, 2020. "The ground for negotiation: Zoning for risk reduction around hazardous plants," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 657-677.
    2. Ostermeijer, Francis & Koster, Hans RA. & van Ommeren, Jos, 2019. "Residential parking costs and car ownership: Implications for parking policy and automated vehicles," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 276-288.
    3. Richard H. Rijnks & Stephen Sheppard, 2018. "Occupant Well-Being and House Values," Department of Economics Working Papers 2018-05, Department of Economics, Williams College.
    4. Fan Liu & Min Min & Ke Zhao & Weiyan Hu, 2020. "Spatial-Temporal Variation in the Impacts of Urban Infrastructure on Housing Prices in Wuhan, China," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-1, February.
    5. Touseef Hussain & Jaffar Abbas & Zou Wei & Mohammad Nurunnabi, 2019. "The Effect of Sustainable Urban Planning and Slum Disamenity on The Value of Neighboring Residential Property: Application of The Hedonic Pricing Model in Rent Price Appraisal," Sustainability, MDPI, Open Access Journal, vol. 11(4), pages 1-20, February.
    6. Loïc Lévi & Jean Jacques Nowak & Sylvain Petit & Hakim Hammadou, 2020. "Industrial legacy and hotel pricing: An application of spatial hedonic pricing analysis in Nord-Pas-de-Calais, France," Post-Print hal-03065276, HAL.

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    More about this item

    Keywords

    hedonic analysis; locally-weighted regression; urban housing markets; industrial risk;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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