RT Journal Article
SR Electronic
T1 Economic Valuation of Environmental Quality Using Property Auction Data: A Structural Estimation Approach
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 703
OP 717
DO 10.3368/le.92.4.703
VO 92
IS 4
A1 Tadao Hoshino
A1 Hayato Nakanishi
YR 2016
UL http://le.uwpress.org/content/92/4/703.abstract
AB This study proposes a method to economically evaluate environmental quality using property auction data. Our approach is consistent with microeconomic auction theory and can directly estimate the value function from the data, a task that is often difficult when using conventional revealed preference methods such as the hedonic approach. We use a method of simulated moments to estimate the value function, which in turn is used to calculate the economic value of environmental quality changes. We apply this method to data on foreclosure property auctions in Tokyo in order to economically evaluate hypothetical improvements in neighborhood fire risks. (JEL Q51)