Measuring the benefits of air quality improvement: A spatial hedonic approach

Chong Won Kim; Tim T. Phipps; Luc Anselin

doi:10.1016/S0095-0696(02)00013-X

Measuring the benefits of air quality improvement: A spatial hedonic approach

Chong Won Kim, Tim T. Phipps, Luc Anselin

Arizona State University

Research output: Contribution to journal › Article

360 Scopus citations

Abstract

The primary objective of this paper is to improve the methodology for estimating hedonic price functions when the data are inherently spatial. A spatial-econometric hedonic housing price model is developed and estimated for the Seoul metropolitan area to measure the marginal value of improvements in sulfur dioxide (SO₂) and nitrogen dioxide (NO_x) concentrations. Diagnostic testing favored the spatial-lag model over the spatial error model. Results showed that SO₂ pollution levels had a significant impact on housing prices while NO_x pollution did not. The authors attribute this differential impact to the relatively higher levels of SO₂ pollution when compared with pollution standards and the relative recency of the NO_x pollution. Marginal WTP for a 4% improvement in mean SO₂ concentrations is about $2333 or 1.4% of mean housing price.

Original language	English (US)
Pages (from-to)	24-39
Number of pages	16
Journal	Journal of Environmental Economics and Management
Volume	45
Issue number	1
DOIs	https://doi.org/10.1016/S0095-0696(02)00013-X
State	Published - Jan 1 2003

ASJC Scopus subject areas

Economics and Econometrics
Management, Monitoring, Policy and Law

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Kim, C. W., Phipps, T. T., & Anselin, L. (2003). Measuring the benefits of air quality improvement: A spatial hedonic approach. Journal of Environmental Economics and Management, 45(1), 24-39. https://doi.org/10.1016/S0095-0696(02)00013-X

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