IDEAS home Printed from https://ideas.repec.org/a/wly/apecpp/v44y2022i3p1373-1392.html
   My bibliography  Save this article

Hedonic property prices and coastal beach width

Author

Listed:
  • Craig E. Landry
  • Dylan Turner
  • Tom Allen

Abstract

Previous research suggests that coastal housing values capitalize the quality of nearby beaches but note potential problems related to measurement errors and reverse causation due to beach replenishment. We offer the first hedonic analysis of communities not engaged in beach replenishment, obviating concern over reverse causation. Statistical evidence supports hedonic specifications that account for proximity to the shoreline, though marginal willingness to pay (WTP) varies with the specification. Using an instrumental variables approach, we find significant downward bias in ordinary least squares estimates of marginal WTP derived from the sale of vacant lots compared to two‐stage least squares estimates on the same vacant lots. Notably, we do not find evidence of the same downward bias in WTP derived from the sale of existing homes.

Suggested Citation

  • Craig E. Landry & Dylan Turner & Tom Allen, 2022. "Hedonic property prices and coastal beach width," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1373-1392, September.
    • Handle: RePEc:wly:apecpp:v:44:y:2022:i:3:p:1373-1392
    DOI: 10.1002/aepp.13197
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/aepp.13197
    Download Restriction: no
    File URL: https://libkey.io/10.1002/aepp.13197?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Patrick Bayer & Christopher Timmins, 2007. "Estimating Equilibrium Models Of Sorting Across Locations," Economic Journal, Royal Economic Society, vol. 117(518), pages 353-374, March.
    2. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    3. Gopalakrishnan, Sathya & Smith, Martin D. & Slott, Jordan M. & Murray, A. Brad, 2011. "The value of disappearing beaches: A hedonic pricing model with endogenous beach width," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 297-310, May.
    4. Edmund M. Balsdon, 2012. "Property Value Capitalization and Municipal Open Space Referenda," Land Economics, University of Wisconsin Press, vol. 88(2), pages 201-232.
    5. Allen Klaiber, H. & Phaneuf, Daniel J., 2010. "Valuing open space in a residential sorting model of the Twin Cities," Journal of Environmental Economics and Management, Elsevier, vol. 60(2), pages 57-77, September.
    6. Olga Filippova & Cuong Nguyen & Ilan Noy & Michael Rehm, 2020. "Who Cares? Future Sea Level Rise and House Prices," Land Economics, University of Wisconsin Press, vol. 96(2), pages 207-224.
    7. David Albouy, 2016. "What Are Cities Worth? Land Rents, Local Productivity, and the Total Value of Amenities," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 477-487, July.
    8. Qiu, Yun & Gopalakrishnan, Sathya, 2018. "Shoreline defense against climate change and capitalized impact of beach nourishment," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 134-147.
    9. Mary Riddel, 2001. "A Dynamic Approach to Estimating Hedonic Prices for Environmental Goods: An Application to Open Space Purchase," Land Economics, University of Wisconsin Press, vol. 77(4), pages 494-512.
    10. Abelson, P. W. & Markandya, A., 1985. "The interpretation of capitalized hedonic prices in a dynamic environment," Journal of Environmental Economics and Management, Elsevier, vol. 12(3), pages 195-206, September.
    11. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    12. Kuminoff, Nicolai V. & Parmeter, Christopher F. & Pope, Jaren C., 2010. "Which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities?," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 145-160, November.
    13. Dylan E McNamara & Sathya Gopalakrishnan & Martin D Smith & A Brad Murray, 2015. "Climate Adaptation and Policy-Induced Inflation of Coastal Property Value," PLOS ONE, Public Library of Science, vol. 10(3), pages 1-12, March.
    14. Sathya Gopalakrishnan & Craig E Landry & Martin D Smith, 2018. "Climate Change Adaptation in Coastal Environments: Modeling Challenges for Resource and Environmental Economists," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 48-68.
    15. Dundas, Steven J., 2017. "Benefits and ancillary costs of natural infrastructure: Evidence from the New Jersey coast," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 62-80.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dylan E. McNamara & Martin D. Smith & Zachary Williams & Sathya Gopalakrishnan & Craig E. Landry, 2024. "Policy and market forces delay real estate price declines on the US coast," Nature Communications, Nature, vol. 15(1), pages 1-16, December.
    2. Jeffrey Wielgus & Monica Grasso & Charles Colgan & Jennifer Zhuang & Sarah Siegel & Joseph Conran & Tadesse Wodajo, 2024. "Natural Capital Considerations for an Extension of the US Marine Economy Satellite Account," NBER Chapters, in: Measuring and Accounting for Environmental Public Goods: A National Accounts Perspective, National Bureau of Economic Research, Inc.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David Wolf & Kenji Takeuchi, 2022. "Who Gives a Dam? Capitalization of Flood Protection in Fukuoka, Japan," Discussion Papers 2203, Graduate School of Economics, Kobe University.
    2. Klaiber, H. Allen, 2014. "Migration and household adaptation to climate: A review of empirical research," Energy Economics, Elsevier, vol. 46(C), pages 539-547.
    3. Meri Davlasheridze & Qin Fan, 2019. "Valuing Seawall Protection in the Wake of Hurricane Ike," Economics of Disasters and Climate Change, Springer, vol. 3(3), pages 257-279, October.
    4. Wolf, David & Takeuchi, Kenji, 2022. "Holding back the storm: Dam capitalization in residential and commercial property values," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    5. Yun Qiu & Sathya Gopalakrishnan & H. Allen Klaiber & Xiaoyu Li, 2020. "Dredging the sand commons: the economic and geophysical drivers of beach nourishment," Climatic Change, Springer, vol. 162(2), pages 363-383, September.
    6. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    7. Megan Mullin & Martin D. Smith & Dylan E. McNamara, 2019. "Paying to save the beach: effects of local finance decisions on coastal management," Climatic Change, Springer, vol. 152(2), pages 275-289, January.
    8. Xuan Huang & Bruno Lanz, 2018. "The Value of Air Quality in Chinese Cities: Evidence from Labor and Property Market Outcomes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(4), pages 849-874, December.
    9. Hybel, Jesper & Mulalic, Ismir, 2022. "Transportation and quality of life," Transportation Research Part A: Policy and Practice, Elsevier, vol. 157(C), pages 107-125.
    10. Beltrán, Allan & Maddison, David & Elliott, Robert, 2019. "The impact of flooding on property prices: A repeat-sales approach," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 62-86.
    11. Qiu, Yun & Gopalakrishnan, Sathya, 2018. "Shoreline defense against climate change and capitalized impact of beach nourishment," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 134-147.
    12. Beasley, W. Jason & Dundas, Steven J., 2021. "Hold the line: Modeling private coastal adaptation through shoreline armoring decisions," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    13. Parton, Lee C. & Dundas, Steven J., 2020. "Fall in the sea, eventually? A green paradox in climate adaptation for coastal housing markets," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    14. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2013. "The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets," Journal of Economic Literature, American Economic Association, vol. 51(4), pages 1007-1062, December.
    15. Tianzheng Zhang & Yingxiang Zeng & Yingjie Zhang & Yan Song & Hongxun Li, 2020. "The Heterogenous Demand for Urban Parks between Home Buyers and Renters: Evidence from Beijing," Sustainability, MDPI, vol. 12(21), pages 1-16, October.
    16. Bakkensen, Laura A. & Ma, Lala, 2020. "Sorting over flood risk and implications for policy reform," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    17. Hybel, Jesper & Mulalic, Ismir, 2021. "Transportation and Quality of Life: Evidence from Denmark," Working Papers 14-2021, Copenhagen Business School, Department of Economics.
    18. von Graevenitz, Kathrine, 2018. "The amenity cost of road noise," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 1-22.
    19. Hashida, Yukiko & Dundas, Steven J., 2023. "The effects of a voluntary property buyout and acquisition program on coastal housing markets: Evidence from New York," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    20. Nicolai V. Kuminoff & Jaren C. Pope, 2014. "Do “Capitalization Effects” For Public Goods Reveal The Public'S Willingness To Pay?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(4), pages 1227-1250, November.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:apecpp:v:44:y:2022:i:3:p:1373-1392. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)2040-5804 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.