Living on the sunny side - the effect of sunshine duration and land prices

Sebastian Keiler and David Koch

ERES from European Real Estate Society (ERES)

Abstract: Asking for price determining factors of real estate prices will always return the location as a major factor. Though undoubtedly driving prices this term stays ambiguous. Seeking for clarification we focus this study on a rather unique location specific influence on land prices. The very special topological circumstances in the mountain region of Austria restrict the access of sunlight in a very significant way. Unlike in topologically less pronounced areas the variation in sunshine emissions varies significantly across parcels due to shading mountains. This is especially true for the winter season. Several studies have found weather effects to be significant for stock returns. This study aims to price the amount of sunshine a parcel obtains and thus shares this attempt with other studies. To our knowledge this application is unique for the real estate sector. In order to explore the effect of sun emissions we focus on undeveloped land plots for residential use and find significant impacts on property prices. Investors are willing to pay for longer sunshine duration while especially sunshine in winter is being regarded as a price determining factor.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2012-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2012_369

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