Area-Based Hedonic Pricing of Urban Green Amenities in Beijing: A Spatial Piecewise Approach

Zhaoyang Liu, Heqing Huang (), Juha Siikamäki and Jintao Xu ()
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Heqing Huang: Peking University
Jintao Xu: Peking University

Environmental & Resource Economics, 2024, vol. 87, issue 5, No 6, 1223-1248

Abstract: Abstract This study explores a spatial piecewise approach for the hedonic valuation of the area of urban green space at different distances from a property, using a rich census dataset collected from Beijing. We explore three novel empirical strategies that improve the identification of the spatial boundary or threshold distance within which green space is capitalised into housing prices. We first delineated a series of concentric circles surrounding each property and measured the area of green space within each doughnut-shaped ring. We next estimated the hedonic price using three methods. The first is a regression spline model combined with a machine learning type of model selection procedure which objectively selects the exact location of the threshold distance that optimises the model’s predictive performance. The second is a novel matching algorithm that minimises covariate imbalance for a continuous treatment variable (i.e., the area of green space) to provide stronger causal evidence on the hedonic prices of green space at different distances. The third is a spatial difference-in-differences approach that further accounts for endogeneity bias associated with unobserved factors. For our dataset, we found that housing prices are more likely to be affected by green space within a 1 km radius.

Keywords: Urban green space; Hedonic pricing; Regression splines; Model selection; Covariate balancing matching for continuous treatment; Spatial difference-in-differences (search for similar items in EconPapers)
JEL-codes: Q51 Q57 R30 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10640-024-00861-2

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