Impacts of Haze on Housing Prices: An Empirical Analysis Based on Data from Chengdu (China)

Runqiu Liu, Chao Yu, Canmian Liu, Jian Jiang and Jing Xu
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Runqiu Liu: Institute of Land Economics and Land Management, Sichuan University, Chengdu 610065, China
Chao Yu: School of Public Administration, Sichuan University, Chengdu 610065, China
Canmian Liu: Business School, Sichuan University, Chengdu 610065, China
Jian Jiang: School of Public Administration, Sichuan University, Chengdu 610065, China
Jing Xu: The Economy and Enterprise Development Institute, Sichuan University, Chengdu 610065, China

IJERPH, 2018, vol. 15, issue 6, 1-21

Abstract: Based on cross-section data of 20 districts in Chengdu, this article reviews the relationships between haze and housing prices with the combined application of Spatial Error Model (SEM) and Spatial Lag Model (SLM). The results illustrate that haze significantly have negative impacts on both the selling and rental prices of houses. Controlling other variables, if the air quality index rises by 0.1, the housing selling prices and rental prices will drop by 3.97% and 4.01%, respectively. Interestingly, housing rental prices have a more significant response to the air quality than housing sale prices. Residents are willing to pay a premium for better air quality and the influence of air quality is partially reflected in housing prices, which indicates that better air quality has been becoming a scarce resource with the improvement of people’s living standard. Furthermore, the impacts of haze on housing prices are also expected to lead to a “crowding out effect” in different regions. This would be detrimental for human capital accumulation and will accelerate the regional divergence in the internal economy and population structure, thus forming a region “fence” within cities.

Keywords: haze; air quality; housing prices; spatial error model; spatial lag model; hedonic price model (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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