Validating Spatial Hedonic Modeling with a Behavioral Approach: Measuring the Impact of Water Quality Degradation on Coastal Housing Markets

Ramachandran Mahesh

No 205664, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Human perception of water quality that determines utility and behavior may not correspond to often used science-based measures, leading to mismeasurement of implicit prices in hedonic models. This paper seeks to estimate the effect of water quality degradation on the sale price of coastal single-family residential properties using a spatially explicit hedonic approach, while validating the measure of water quality using a behavioral approach. The results show that a combined approach of hedonic modeling and behavioral validation is an important preliminary step in addressing omitted variable and perception biases present in traditional hedonic modeling approaches.

Keywords: Community/Rural/Urban Development; Environmental Economics and Policy; Institutional and Behavioral Economics; Land Economics/Use; Public Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 31
Date: 2015
New Economics Papers: this item is included in nep-env and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205664

DOI: 10.22004/ag.econ.205664

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