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Assessing the impact of renewable energy infrastructure on the “tourist value” in rural landscapes: a spatial hedonic approach

Olivier Joalland and Tina Rambonilaza

Cahiers du GREThA from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

Abstract: Installing greater numbers of renewable energy solutions in France has the potential to generate various negative externalities for the users of rural areas. Wind turbines and overhead power lines can often be seen as “eyesores” which adversely affect the aesthetic qualities of rural landscapes, thus reducing their use value. In this study, we apply the hedonic price method to evaluate this loss of value from the point of view of the tourist industry. Data were collected relating to the prices of rural gîtes (small cottage rentals) in three French regions. Prices were linked to three categories of variables relating to the properties: characteristics of the properties themselves, the surrounding environment, and their proximity to power-related infrastructure. The generalized method of moments was used to deal with spatial autocorrelation of errors. Our results highlighted the importance of comfort and proximity to the coast in determining the rental value of each property. Landscape value was significantly reduced when properties were located close to energy infrastructures. While it is important not to lose sight of the fact that the majority of rural cottages are located at some considerable distance from energy infrastructures, the losses highlighted in this study show that appropriate support mechanisms need to be put in place in affected rural areas.

Keywords: Externalities; -; Hedonic; prices; -; Renewable; energy; -Wind; power (search for similar items in EconPapers)
JEL-codes: Q51 R11 R33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-reg
Date: 2017
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Handle: RePEc:grt:wpegrt:2017-10