Urban Real Estate Values and Ecosystem Disservices: An Estimate Model Based on Regression Analysis

Antonio Nesticò and Marianna La Marca
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Antonio Nesticò: Department of Civil Engineering, University of Salerno, Via Giovanni Paolo II, 132-84084 Fisciano (SA), Italy
Marianna La Marca: Department of Civil Engineering, University of Salerno, Via Giovanni Paolo II, 132-84084 Fisciano (SA), Italy

Sustainability, 2020, vol. 12, issue 16, 1-15

Abstract: It is well known that production activities are often the cause of ecosystem disservices. Such disservices can have serious effects on urban real estate values. But how much is the contraction that the market values of housing suffer due to the polluting emissions produced by a medium-sized foundry? And how large is the urban area within which buildings are depreciated? With this research we intend to give an answer. To this aim, with specific regard to urban apartments free from contractual constraints, the use of multiple regression analysis makes it possible to obtain a function that explains the real estate value through multiple variables, one of which is representative of the ecosystem disservice. The study reveals that the urban area that suffers from the negative effects of polluting industrial activities on property prices can be extensive. On the other hand, the contractions of real estate values can even reach 43%. These results, for the first time expressed in quantitative terms, must direct towards urban planning interventions, and more generally of economic policy, aimed at minimizing the environmental impacts of production activities. This is not only for the essential obligations to protect environment and human health, but also in relation to the direct economic implications of the decrease in the value of real estate.

Keywords: urban real estate values; ecosystem services and disservices; multiple regression analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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