We are grateful to Luc Anselin, Jan Brueckner, Michael Greenstone, Wade Martin, Francisco Martinez, Luis Rizzi, Jeffrey Zabel, and seminar participants at the Stanford Environmental Economics Workshop, the Oslo Workshop on Valuation Methods in Transport Planning (Institute of Transport Economics, Oslo), and Universitat Autònoma de Barcelona for comments on earlier drafts. We also thank three anonymous referees for helpful suggestions.
SPATIAL HEDONICS AND THE WILLINGNESS TO PAY FOR RESIDENTIAL AMENITIES*
Article first published online: 11 JUL 2012
© 2012, Wiley Periodicals, Inc.
Journal of Regional Science
Volume 52, Issue 4, pages 635–647, October 2012
How to Cite
Small, K. A. and Steimetz, S. S.C. (2012), SPATIAL HEDONICS AND THE WILLINGNESS TO PAY FOR RESIDENTIAL AMENITIES. Journal of Regional Science, 52: 635–647. doi: 10.1111/j.1467-9787.2012.00774.x
- Issue published online: 19 SEP 2012
- Article first published online: 11 JUL 2012
- Received: January 2011; revised: December 2011; accepted: December 2011
ABSTRACT We investigate the role of spatial multipliers when using spatial-lag hedonic models to measure the benefits of residential amenity improvements. Such benefits are commonly measured using the product of the coefficient of the amenity in question and a spatial multiplier. We show this is correct only when the spatial spillovers transmitted through the multiplier are strictly technological. If they are instead strictly pecuniary, then benefits are fully measured using the coefficient with no spatial multiplier. In either case, or in intermediate cases where both types of spillovers exist, a spatial-lag specification is required to obtain valid benefits measures.