RT Journal Article
SR Electronic
T1 A Dynamic Approach to Estimating Hedonic Prices for Environmental Goods: An Application to Open Space Purchase
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 494
OP 512
DO 10.2307/3146936
VO 77
IS 4
A1 Riddel, Mary
YR 2001
UL http://le.uwpress.org/content/77/4/494.abstract
AB If housing markets exhibit slow adjustment to system shocks, then hedonic estimates of the price impact from environmental amenity trends may be time variant. This paper suggests an alternative to the cross-sectional model for estimating hedonic prices using an error correction approach that allows for endogenous environmental quality. The model is applied to data concerning an open space purchase program in Boulder, Colorado, and shows that the economic impact of an open space purchase takes several years to be fully realized. This observation questions using cross-sectional, hedonic models for evaluating willingness to pay for time-trended environmental amenities. (JEL Q24, R521)