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Value of cleaner neighborhoods: Application of hedonic price model in low income context

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  • Nepal, Mani
  • Rai, Rajesh K.
  • Khadayat, Madan S.
  • Somanathan, E.

Abstract

Municipal solid waste management is a challenging issue in developing countries. An unclean neighborhood could have a significant negative impact on housing property values too as it may lead to numerous diseases in addition to diminished aesthetic value. This study examines the effects of municipal solid waste collection services at the neighborhood level on housing property values using the hedonic price model. We use a sub-sample of nationally representative household survey data from urban areas as well as primary data collected from one of the metropolitan cities in Nepal. Our results suggest that city residents place a high price premium (between 25% and 57%) on cleaner neighborhoods and less (−11%) on open drains. These numbers indicate that better waste management will bring high returns to home owners, and also the municipality in cities where the tax base includes the assessed value of property.

Suggested Citation

  • Nepal, Mani & Rai, Rajesh K. & Khadayat, Madan S. & Somanathan, E., 2020. "Value of cleaner neighborhoods: Application of hedonic price model in low income context," World Development, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:wdevel:v:131:y:2020:i:c:s0305750x20300917
    DOI: 10.1016/j.worlddev.2020.104965
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    2. Stefano Cellini & Francisco Nobre, 2023. "Business Improvement Districts and Housing Markets: Evidence from Neighborhoods in London," School of Economics Discussion Papers 0523, School of Economics, University of Surrey.
    3. Junpeng Li & Puneet Vatsa & Wanglin Ma, 2023. "Small Acts With Big Impacts: Does Garbage Classification Improve Subjective Well-Being in Rural China?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 18(3), pages 1337-1363, June.
    4. Chakrabarti, Sandip & Kushari, Triparnee & Mazumder, Taraknath, 2022. "Does transportation network centrality determine housing price?," Journal of Transport Geography, Elsevier, vol. 103(C).
    5. Mei, Yingdan & Qiu, Jixiang & Wu, Jialu & Meng, Lina, 2021. "Do residents care about urban dumps? Evidence from individual housing transaction data," Land Use Policy, Elsevier, vol. 109(C).
    6. Liu, Yanan & Tang, Yugang, 2021. "Epidemic shocks and housing price responses: Evidence from China's urban residential communities," Regional Science and Urban Economics, Elsevier, vol. 89(C).
    7. Marilena Mironiuc & Elena Ionașcu & Maria Carmen Huian & Alina Țaran, 2021. "Reflecting the Sustainability Dimensions on the Residential Real Estate Prices," Sustainability, MDPI, vol. 13(5), pages 1-28, March.
    8. Manuel A. Zambrano-Monserrate & Maria Alejandra Ruano & Carlos A. Silva & Ronald Campoverde & Christian Rosero & Daniel A. Sanchez-Loor, 2023. "Dynamism of the housing rental market in Guayaquil, Ecuador: an empirical analysis," Empirical Economics, Springer, vol. 64(2), pages 747-764, February.
    9. Osiichuk, Dmytro & Wnuczak, Paweł, 2020. "Aplikacja koncepcji zarządzania wartością VBM w publicznych instytucjach kultury," Studia z Polityki Publicznej / Public Policy Studies, Warsaw School of Economics, vol. 7(3), pages 1-18, October.

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