Does the Measurement of Property and Structural Characteristics Affect Estimated Implicit Prices for Environmental Amenities in a Hedonic Model?

Does the Measurement of Property and Structural Characteristics Affect Estimated Implicit Prices... Hedonic models are commonly used to estimate marginal willingness to pay for environmental amenities. These studies utilize variables that are assumed to be measured without error (such as the square footage of the lot or the number of bedrooms) and proxy variables (such as neighborhood or school quality). Lot and structural characteristics may in fact be measured with error. Potential sources of error include inaccurate measures and inconsistent updating. We investigate the effect of using tax-assessor data versus survey data from purchasers to estimate the implicit price of an environmental amenity, lake-water clarity. Convergent validity of the implicit price for water clarity is established if the town and survey data provide statistically indistinguishable estimates of implicit prices for this amenity. Overall, the town-office and survey data on property characteristics were not statistically different in three of the four market groupings examined, which suggests that the traditional municipal sources of these data may not contain substantial measurement error. Furthermore, convergent validity is satisfied in all four market areas. However, differences in computed implicit prices of clarity in two of the market areas are large enough that policy decisions for environmental quality could be affected by the source of the lot and structural data. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

Does the Measurement of Property and Structural Characteristics Affect Estimated Implicit Prices for Environmental Amenities in a Hedonic Model?

Loading next page...
 
/lp/springer_journal/does-the-measurement-of-property-and-structural-characteristics-affect-HFSyBn0NVP
Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1023/A:1007855901029
Publisher site
See Article on Publisher Site

Abstract

Hedonic models are commonly used to estimate marginal willingness to pay for environmental amenities. These studies utilize variables that are assumed to be measured without error (such as the square footage of the lot or the number of bedrooms) and proxy variables (such as neighborhood or school quality). Lot and structural characteristics may in fact be measured with error. Potential sources of error include inaccurate measures and inconsistent updating. We investigate the effect of using tax-assessor data versus survey data from purchasers to estimate the implicit price of an environmental amenity, lake-water clarity. Convergent validity of the implicit price for water clarity is established if the town and survey data provide statistically indistinguishable estimates of implicit prices for this amenity. Overall, the town-office and survey data on property characteristics were not statistically different in three of the four market groupings examined, which suggests that the traditional municipal sources of these data may not contain substantial measurement error. Furthermore, convergent validity is satisfied in all four market areas. However, differences in computed implicit prices of clarity in two of the market areas are large enough that policy decisions for environmental quality could be affected by the source of the lot and structural data.

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: Oct 3, 2004

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve Freelancer

DeepDyve Pro

Price
FREE
$49/month

$360/year
Save searches from Google Scholar, PubMed
Create lists to organize your research
Export lists, citations
Access to DeepDyve database
Abstract access only
Unlimited access to over
18 million full-text articles
Print
20 pages/month
PDF Discount
20% off