Measuring the Externality Effects of Commercial Land Use on Residential Land Value: A Case Study of Seoul

Hee Jin Yang, Jihoon Song and Mack Joong Choi
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Hee Jin Yang: Center of Housing Policy Development and Research, Housing Construction Bureau, Seoul Metropolitan Government, 110 Sejong-daero, Jung-gu, Seoul 04524, Korea
Jihoon Song: Graduate School of Design, Harvard University, 48 Quincy Street, Cambridge, MA 02138, USA
Mack Joong Choi: Department of Urban and Regional Planning, Graduate School of Environmental Studies, Seoul National University, #82-310, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea

Sustainability, 2016, vol. 8, issue 5, 1-15

Abstract: Two contrasting theories purport to explain the effects of neighborhood non-residential use on residential property values. In traditional zoning theory, separating land from commercial land use is considered to protect residential environments from negative externalities such as noise, litter, and congestion. By contrast, contemporary planning principles including Smart Growth emphasize positive impacts of mixed land use on residential environment, which lead to more walkable and sustainable communities. This study attempts to empirically investigate how positive and negative externalities of commercial land use, referred to as “proximity effects” and “disamenity effects” respectively, affect residential land values. Using data gathered in Seoul, we pay attention to two particular aspects of commercial land use: spatial concentration and neighborhood scale. Spatial concentration is determined by the number of commercial employees present in the buffer zone around an individual residential parcel. We model four geographically distinct neighborhood scales as we compare spatial concentrations in and across commercial zones. Quadratic regression analyses of our data show the trade-off relationship that a higher spatial concentration of commercial land use in a neighborhood initially results in increased residential land values, but drops off beyond a threshold level by excessive noise or crowding.

Keywords: commercial land use; proximity effects; disamenity effects; spatial concentration; neighborhood scale (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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