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Using Contingent-Pricing Analysis to Value Open Space and Its Duration at Residential Locations

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  • Dietrich Earnhart

Abstract

To estimate benefits from open space adjacent to residences, this paper blends contingent valuation and conjoint analysis within a housing market context. The resulting framework — "contingent-pricing analysis," — represents the stated preference counterpart to hedonic-pricing analysis by asking individuals to state prices for hypothetical housing locations, which include an environmental amenity. Then, it asks individuals to state their willingness to pay for a better and longer lasting environmental amenity. As an advantage over hedonic-pricing analysis, it directly isolates willingness to pay. Results indicate that potentially short-lasting open space adds no value, while preserved open space adds $ 5,066 or 5% to housing value.

Suggested Citation

  • Dietrich Earnhart, 2006. "Using Contingent-Pricing Analysis to Value Open Space and Its Duration at Residential Locations," Land Economics, University of Wisconsin Press, vol. 82(1), pages 17-35.
    • Handle: RePEc:uwp:landec:v:82:y:2006:i:1:p:17-35
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    Cited by:

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    2. Sahan T. M. Dissanayake & Amy W. Ando, 2014. "Valuing Grassland Restoration: Proximity to Substitutes and Trade-offs among Conservation Attributes," Land Economics, University of Wisconsin Press, vol. 90(2), pages 237-259.
    3. Rouhani, Omid M. & Knittel, Christopher R. & Niemeier, Debbie, 2014. "Road Supply in Central London: Addition of an Ignored Social Cost," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 53(1).
    4. Maria A. Cunha‐e‐Sá & Sofia F. Franco, 2017. "The Effects of Development Constraints on Forest Management at the Urban‐Forest Interface," American Journal of Agricultural Economics, John Wiley & Sons, vol. 99(3), pages 614-636, April.
    5. Traoré, Sidnoma, 2019. "Residential location choice in a developing country: What matter? A choice experiment application in Burkina Faso," Forest Policy and Economics, Elsevier, vol. 102(C), pages 1-9.
    6. Caruso, Geoffrey & Peeters, Dominique & Cavailhes, Jean & Rounsevell, Mark, 2007. "Spatial configurations in a periurban city. A cellular automata-based microeconomic model," Regional Science and Urban Economics, Elsevier, vol. 37(5), pages 542-567, September.
    7. Dani Broitman & Vladimir Griskin & Daniel Czamanski, 2019. "Unbundling negative and positive externalities of nature in cities: The influence of wild animals on housing prices," Urban Studies, Urban Studies Journal Limited, vol. 56(13), pages 2820-2836, October.
    8. Paul Asabere & Forrest Huffman, 2009. "The Relative Impacts of Trails and Greenbelts on Home Price," The Journal of Real Estate Finance and Economics, Springer, vol. 38(4), pages 408-419, May.
    9. Bark, R.H. & Osgood, D.E. & Colby, B.G. & Katz, G. & Stromberg, J., 2009. "Habitat preservation and restoration: Do homebuyers have preferences for quality habitat?," Ecological Economics, Elsevier, vol. 68(5), pages 1465-1475, March.
    10. Paul Asabere, 2014. "The Value of Homes in Cluster Development Residential Districts: The Relative Significance of the Permanent Open Spaces Associated with Clusters," The Journal of Real Estate Finance and Economics, Springer, vol. 48(2), pages 244-255, February.
    11. Guillaume POUYANNE & Frederic GASCHET, 2013. "The Effect Of Current And Future Land Use On House Prices," ERSA conference papers ersa13p249, European Regional Science Association.
    12. Jayalath, Tharaka A. & Grala, Robert K. & Grado, Stephen C. & Evans, David L., 2021. "Increasing provision of ecosystem services through participation in a conservation program," Ecosystem Services, Elsevier, vol. 50(C).
    13. Kalinin, Alexey V. & Sims, Katharine R.E. & Meyer, Spencer R. & Thompson, Jonathan R., 2023. "Does land conservation raise property taxes? Evidence from New England cities and towns," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    14. Fabian Waltert & Felix Schlaepfer, 2007. "The role of landscape amenities in regional development: a survey of migration, regional economic and hedonic pricing studies," SOI - Working Papers 0710, Socioeconomic Institute - University of Zurich.

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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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