Journal of Real Estate Finance and Economics, 22:2/3, 221±237, 2001
# 2001 Kluwer Academic Publishers. Manufactured in The Netherlands.
Valuing Open Space and Land-Use Patterns in
World Bank, 1818 H Street, Washington, DC 20433
LYNNE LEWIS, BENNETT*
Bates College, Department of Economics, Lewiston, ME 04240
This article presents the results of a hedonic property value analysis for an urban watershed in New Haven
County, Connecticut. We use spatially referenced housing and land-use data to capture the effect of environmental
variables around the house location. We calculate and incorporate data on open space, land-use diversity, and
other environmental variables to capture spatial variation in environmental quality around each house location.
We are ultimately interested in determining whether variables that are re¯ective of spatial diversity do a better job
of describing human preferences for housing choice than broad categories of rural versus urban areas. Using a rich
data set of over 4,000 houses, we study these effects within a watershed that includes areas of high environmental
quality and low environmental quality as well as varying patterns of socioeconomic conditions. Our results
suggest that, in addition to structural characteristics, variables describing neighborhood socioeconomic
characteristics and variables describing land use and environmental quality are in¯uential in determining human
values. We also ®nd that the scale at which we measure these spatially de®ned environmental variables is
Key Words: hedonic property value, urban watersheds, land use, spatially referenced data
Over the past decade, various papers applying hedonic property analysis to environmental
valuation issues have suggested that the environmental features of the surrounding
landscape are of some importance in determining its market value. These studies provide
evidence that the market price of a house re¯ects the level of some environmental good
homeowners are aware of and are willing to pay for. Various papers in the literature
suggest that variables describing land use and environmental quality are in¯uential in
determining human values. A number of studies now exist that have used hedonic property
models to examine the effects of environmental disamenities and amenities.
studies include those highlighting the impact of variations in site-speci®c factors such as
*Lead authorship not assigned.