Journal of Real Estate Finance and Economics, 19:2, 113±131 (1999)
# 1999 Kluwer Academic Publishers, Boston. Manufactured in The Netherlands.
A Housing Price Model with Endogenous Externality
Location: A Study of Mobile Home Parks
HENRY J. MUNNEKE
Associate Professor of Real Estate, 206 Brooks Hall, Terry College of Business, University of Georgia,
Athens, GA 30602-6255, E-mail: firstname.lastname@example.org
V. CARLOS SLAWSON, JR.
Assistant Professor of Real Estate, 2164 A CEBA, E.J. Ourso College of Business, Louisiana State University,
Baton Rouge, LA 70803
This research explores the impact of mobile home parks on the value of single-family homes. This is the ®rst
study that empirically analyzes the effect of mobile home parks on property values. The empirical methodology
used attempts to address the potential identi®cation problem that exists within this study; it is possible that mobile
home parks are located in areas of relatively lower land values or next to other land uses that impact property
values. To address this identi®cation problem, mobile home park locations are treated as endogenous within the
model and the mobile home parks are identi®ed as being located in residential or non-residential areas. The results
suggest a negative effect on the selling price of single-family dwellings in close proximity to mobile home parks
located in residential areas.
Key Words: externalities, housing values, mobile home parks, location.
The study of the effects of externalities, both positive and negative, on the value of single-
family dwellings is well documented. The study of non-conforming uses covers a wide
range of topics, from the negative effect of air pollution (Nourse, 1970; Nelson, 1978; and
Harrison and Rubinfeld, 1978), to crime (Buck et al., 1991 and Hellman and Narroff,
1979) and zoning (Jud, 1980). However, many studies deal with property issues that are
less macro than those previously mentioned. These studies tend to look at non-conforming
uses on a ``micro'' level, such as the impact of churches (Quang Do et al., 1994), golf
courses (Quang Do et al., 1995), traf®c (Hughes and Sirmans, 1992), shopping centers
(Colwell et al., 1985), and high rise of®ce buildings (Thibodeau, 1990). A study by Wang
et al. (1991) extended the study of externalities to a single land use classi®cation. Their
study looks at the impact of residential rental properties on the value of single-family
dwellings. The current study examines the impact of mobile home parks
on the value of
single-family dwellings in East Baton Rouge Parish, Louisiana.
The market for mobile homes makes up a signi®cant portion of the new home market in
the U.S. During 1995, more than one out of every three new homes (comprised of single-
family dwellings and mobile homes) built or placed in the U.S. was a mobile home.
Numerous zoning ordinance disputes and court cases involving mobile homes, or