Raymond B. Palmquist

ESTIMATING THE DEMAND FOR THE CHARACTERISTICS OF HOUSING

A hstract-Estimates of the demand for the characteristics contained in a differentiated product such as housing can be based on hedonic regressions. However, previous studies have not dealt with several potential problems in such estimation. A more appropriate framework for the estimation is provided in this paper. Also data from a number of cities are used to eliminate the identification problem, and the endogeneity of the marginal prices derived from non-linear hedonic equations is considered in the estimation. The results on own and cross price elasticities, expenditure elasticities, and the effects of socio-economic vafiables accord well with expectations.

A Hedonic Study of the Effects of Erosion Control and Drainage on Farmland Values

Valuing farmland improvements is important for individual farmers and policy makers. This paper demonstrates the use of a hedonic land value study to determine the value of erosion control and drainage using data from North Carolina. Land values are significantly affected by both potential erosivity and drainage requirements. This studys estimates are compared with estimates derived from a variety of other types of studies.

Measuring environmental effects on property values without hedonic regressions

Abstract The effect of environmental nuisances on property values has been frequently studied using hedonic regressions, yet that method has extensive data and estimation requirements. The technique developed in this paper uses repeat sales on houses to substantially reduce these requirements. The technique adjusts for depreciation between sales and allows for nonzero error covariance terms when a house has been sold more than twice. The effect of highway noise on property values is studied using this method, and the results are statistically equivalent to the results of an extensive hedonic study for the same area.

Alternative Techniques for Developing Real Estate Price Indexes

T HE rapid rate of increase in the prices of houses in recent years has resulted in renewed interest in trends in residential real estate. A widely quoted study by the Harvard-MIT Joint Center for Urban Studies (Solomon, et al., 1977) showed that in 1976 only 27% of families could afford to buy the median priced new home, a significant change from 1970 when 46% of families were able to make such a purchase. Such rapid changes could result in significant income redistribution effects, and policy proposals have been numerous. To assess these trends and proposals, it is necessary to have accurate methods of developing residential real estate price indexes. Most real estate indexes have been based on the average or median selling price in each year for new or used houses. Yet there may exist substantial differences in the houses on the market at different times, so such indexes contain quality changes as well as pure price changes. Because housing is a highly heterogeneous commodity, the measurement of quality-adjusted price changes has proven difficult. Such measurement is desirable not simply because of the recent significant price changes in the real estate market, but also because economists have found property values to be one of the best sources of information on goods for which markets do not exist. Although in the past cross-sectional studies have generally been used for this purpose, questions remain concerning the timing of the impacts. Comparisons of real estate price indexes can provide insights into the dynamics of such effects. Among the techniques suggested for developing quality-adjusted price indexes, approaches using hedonic regressions and repeat-sale regressions appear to be the most promising. In this paper, alternative local price indexes are developed using modifications of the hedonic and repeat-sale techniques. For the case considered, the two independent techniques provide statistically identical indexes of the real price of housing. The estimated rate of increase in house prices using the hedonic and repeat-sale techniques is substantially lower than the non-quality adjusted rate implied by the change in average selling price.

Environmental Conditions, Reservation Prices, and Time on the Market for Housing

A general analytical model to describe the impact of environmental disamenities on duration of sales is derived. A statistical technique to recover a seller’s reservation price is proposed. An econometric procedure that consistently estimates market duration and a seller’s reservation price is described. An application to the impact of highway noise on property values and market duration is presented. The estimation results show that, while highway noise has a significant negative impact on forming reservation prices and predicting sale prices, the noise effect on duration of sales is not statistically significant. Empirical evidence also shows a negative impact of market duration on reservation prices, which indicates an updating process for reservation prices over time.

Transportation Improvements and Land Values in the Antebellum United States: A Hedonic Approach

We offer county-level estimates of the effect of water and rail access on the value of antebellum farms. Employing a hedonic model, we find that in 1850 average farm values in counties with access to a canal or navigable river were

Integrating Property Value and Local Recreation Models to Value Ecosystem Services in Urban Watersheds

2.68 per acre greater than counties without such access and

Marine Debris, Beach Quality, and Non-Market Values

1.80 greater with rail access. In 1860 the figures were

Welfare measurement for environmental improvements using the hedonic model: The case of nonparametric marginal prices

3.75 for a canal or river access and

Valuing Air Quality With Hedonic and Discrete Choice Models

1.35 for rail. With average farm size around 200 acres and per capita national income roughly