Externalities Imposed on Residential Properties in Highly Urbanized Areas

Geerte Cotteleer and Jack H.M. Peerlings

No 43950, 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists

Abstract: In highly industrialized areas open spaces such as farmland and nature are under pressure since urban areas are expanding at their expense. Because of the high opportunity costs of development in urban areas, a high price has to be paid for the maintenance or creation of open space. The question is if this high price can be justified by the value of the open space. We estimate the value residents attach to surrounding open space in a hedonic pricing model. More specifically, we investigate in a highly urbanized area in the Netherlands how the externalities of farmland, nature, and other uses, such as industrial areas and the sea affect residential property prices. Moreover, spatial lag and error dependence are corrected for in the hedonic pricing model used to estimate the value of open space and other externalities. According to our results premiums are paid by residents who buy properties close to urban parks and the North Sea and for properties with views on open space.

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Pages: 12
Date: 2008
New Economics Papers: this item is included in nep-geo and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae08:43950

DOI: 10.22004/ag.econ.43950

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