Improving information in project appraisal using hedonic pricing : a case study of marina berthing charges

Hedonic pricing techniques can be used to generate quantitative information useful to the project appraiser at various stages of the project cycle, most notably project formulation and investment appraisal. To illustrate, a hedonic pricing model is applied to marina berthing charges in England and Wales. The technique determines the relevant marina facilities that are reflected in marina rental price. The contribution of the key marina facilities is expressed in monetary terms as the contribution to cost per overall rental price per foot.

Price Premium for High-Efficiency Refrigerators and Calculation of Price-Elasticities for Close-Substitutes: Combining Hedonic Pricing and Demand Systems

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Office rent determinants: a hedonic panel analysis

It has been frequently observed that office markets are subject to particularly high fluctuations in rents and vacancy levels, thus exposing real estate investors to considerable risk regarding expected future income streams. This paper analyzes the determinants of office rents and their variability over time and across sub-markets to gain insight into the rent price formation and its stability across space and over time. No support is found for the single-market hypothesis which states that arbitrage opportunities effectively align real estate pricing schemes in various parts of city. Instead, the results suggest that the importance of hedonic pricing factors varies both over time and across submarkets.

Comparative study : health research on traffic noise pollution vs. Technical research on traffic noise mitigation

Community awareness and the perception on the traffic noise related health impacts have increased significantly over the last decade resulting in a large volume of public inquiries flowing to Road Authorities for planning advice. Traffic noise management in the urban environment is therefore becoming a “social obligation”, essentially due to noise related health concerns. Although various aspects of urban noise pollution and mitigation have been researched independently, an integrated approach by stakeholders has not been attempted. Although the current treatment and mitigation strategies are predominantly handled by the Road Agencies, a concerted effort by all stakeholders is becoming mandatory for effective and tangible outcomes in the future. A research project is underway a RMIT University, Australia, led by the second author to consider the use of “hedonic pricing” for alternative noise amelioration treatments within the road reserve and outside the road reserve. The project aims to foster a full range noise abatement strategy encompassing source, path and noise receiver. The benefit of such a study would be to mitigate the problem where it is most effective and would defuse traditional “authority” boundaries to produce the optimum outcome. The project is conducted in collaboration with the Department of Main Roads Queensland, Australia and funded by the CRC for Construction Innovation. As part of this study, a comprehensive literature search is currently underway to investigate the advancements in community health research, related to environmental noise pollution, and the advancements in technical and engineering research in mitigating the issue. This paper presents the outcomes of this work outlining state of the art, national and international good practices and gap analysis to identify major anomalies and developments.

Brand value of property in Bangkok Metropolitan Region (BMR), Thailand

This paper aims to evaluate the brand value of property in subdivision developments in the Bangkok Metropolitan Region (BMR), Thailand. The result has been determined by the application of a hedonic price model. The development of the model is developed based on a sample of 1,755 property sales during the period of 1992-2010 in eight zones of the BMR. The results indicate that the use of a semi-logarithmic model has stronger explanatory power and is more reliable. Property price increases 12.90% from the branding. Meanwhile, the price annually increases 2.96%; lot size and dwelling area have positive impacts on the price. In contrast, duplexes and townhouses have a negative impact on the price compared to single detached houses. Moreover, the price of properties which are located outside the Bangkok inner city area is reduced by 21.26% to 43.19%. These findings also contribute towards a new understanding of the positive impact of branding on the property price in the BMR. The result is useful for setting selling prices for branded and unbranded properties, and the model could provide a reference for setting property prices in subdivision developments in the BMR.

Measuring the preference for dwelling characteristics of Melbourne : railway stations and house prices

The relationship between public transportation and home values has proven to be complex, with studies providing divergent findings. Using Victorian Valuer General Data for 2009, this paper applies a hedonic pricing approach to the Melbourne metropolitan housing market in order to estimate the impacts of proximity to a train station on residential property prices. The findings reveal a negative impact on dwelling price for those properties within 125 metres from a train station and a positive relationship between dwelling price and proximity for properties more than 125 metres away.

Quality change in Brazilian automobiles

In this paper I investigate the quality evolution ofBrazilian autos. To measure the quality evolution of Brazilian autos, I have assembled a data set for Brazilian passenger cars for the period 1960-1994, to which I have applied the hedonic pricing methodology. To the best of my k:nowledge, this is the first time an index of quality change has been constructed for the Brazilian automobile industry. The results presented here have two major implications. They allow a better -- ......... understanding of product innovation in Brazil's auto industry, and they provide a clearer explanation of the behavior of auto prices.

Benefícios econômicos agregados às propriedades urbanas pelas paisagens naturais

Amenities value provided by green areas, sea, river and natural landscapes are hardly perceived and incorporated on urban planning and development. In this work, distance and view to protected and non-protected green areas, sea and river were evaluated as to how they increase the housing prices in Natal. Hedonic pricing methods were used with linear models to estimate the marginal implicit value of environmental, residential and neighborhood features. Results on Chapter 1 demonstrate the view to the sea and protected natural areas were largely capitalized on housing prices, while non-protected natural areas didn t display such effect. Housing prices also increase when close to the sea or to parks entrance. However, housing prices fall when houses are near non-protected natural areas. When estates with sea view were excluded, the protected natural areas view and a longer distance to non-protected natural areas increased dwelling prices. Results on Chapter 2 point the sea view as an hedonic variable the contributes strongly to the property selling prices, even though not always as the greatest contributor; furthermore, the property proximity to Dunas Park or City of the Park entrance increases its price, as does closeness to Dunas Park, view to City of the Park or Dunas Park. On the other hand, selling prices diminish if properties are close to City of the Park or Morro do Careca. Results on this study confirm the hedonic pricing methods is an important intrument, capable of revealing to popullation the importance of enviromental amenities and can be used by public managers for creating public policies for conservation and restoration projects

The Economics of Threatened Species Conservation: A Review and Analysis

Stabilizing human population size and reducing human-caused impacts on the environment are keys to conserving threatened species (TS). Earth's human population is ~ 7 billion and increasing by ~ 76 million per year. This equates to a human birth-death ratio of 2.35 annually. The 2007 Red List prepared by the International Union for Conservation of Nature and Natural Resources (IUCN) categorized 16,306 species of vertebrates, invertebrates, plants, and other organisms (e.g., lichens, algae) as TS. This is ~ 1 percent of the 1,589,161 species described by IUCN or ~ 0.0033 percent of the believed 5,000,000 total species. Of the IUCN’s described species, vertebrates comprised relatively the most TS listings within respective taxonomic categories (5,742 of 59,811), while invertebrates (2,108 of 1,203,175), plants (8,447 of 297,326), and other species (9 of 28,849) accounted for minor class percentages. Conservation economics comprises microeconomic and macroeconomic principles involving interactions among ecological, environmental, and natural resource economics. A sustainable-growth (steady-state) economy has been posited as instrumental to preserving biological diversity and slowing extinctions in the wild, but few nations endorse this approach. Expanding growth principles characterize most nations' economic policies. To date, statutory fine, captive breeding cost, contingent valuation analysis, hedonic pricing, and travel cost methods are used to value TS in economic research and models. Improved valuation methods of TS are needed for benefit-cost analysis (BCA) of conservation plans. This Chapter provides a review and analysis of: (1) the IUCN status of species, (2) economic principles inherent to sustainable versus growth economies, and (3) methodological issues which hinder effective BCAs of TS conservation.

Landfill Closure and Housing Values

The United States disposes roughly 60% of the municipal solid waste it generates each year in solid waste disposal facilities, commonly known as landfills. Hedonic pricing studies have estimated the external costs of landfills on neighboring housing markets, but the literature is silent on what happens to property values after the landfill closes. Original housing price data collected both before and after a landfill closure are used to estimate how a landfill closure affects neighboring property values. Results of both a hedonic pricing model and repeat-sales estimator are used in the analysis.

Desarrollo de un modelo de formación del valor inmobiliario en áreas de crecimiento suburbano. Aplicación a la comarca de la Vega Baja del Segura en el litoral alicantino

Una de las principales líneas de investigación de la economía urbana es el comportamiento del mercado inmobiliario y sus relaciones con la estructura territorial. Dentro de este contexto, la reflexión sobre el significado del valor urbano, y abordar su variabilidad, constituye un tema de especial importancia, dada la relevancia que ha supuesto y supone la actividad inmobiliaria en España. El presente estudio ha planteado como principal objetivo la identificación de aquellos factores, ligados a la localización que explican la formación del valor inmobiliario y justifican su variabilidad. Definir este proceso precisa de una evaluación a escala territorial estableciendo aquellos factores de carácter socioeconómico, medioambiental y urbanístico que estructuran el desarrollo urbano, condicionan la demanda de inmuebles y, por tanto, los procesos de formación de su valor. El análisis se centra en valores inmobiliarios residenciales localizados en áreas litorales donde la presión del sector turístico ha impulsado un amplio. Para ello, el ámbito territorial seleccionado como objeto de estudio se sitúa en la costa mediterránea española, al sur de la provincia de Alicante, la comarca de la Vega Baja del Segura. La zona, con una amplia diversidad ecológica y paisajística, ha mantenido históricamente una clara distinción entre espacio urbano y espacio rural. Esta dicotomía ha cambiado drásticamente en las últimas décadas, experimentándose un fuerte crecimiento demográfico y económico ligado a los sectores turístico e inmobiliario, aspectos que han tenido un claro reflejo en los valores inmobiliarios. Este desarrollo de la comarca es un claro ejemplo de la política expansionista de los mercados de suelo que ha tenido lugar en la costa española en las dos últimas décadas y que derivado en la regeneración de un amplio tejido suburbano. El conocimiento del marco territorial ha posibilitado realizar un análisis de variabilidad espacial mediante un tratamiento masivo de datos, así como un análisis econométrico que determina los factores que se valoran positivamente y negativamente por el potencial comprador. Estas relaciones permiten establecer diferentes estructuras matemáticas basadas en los modelos de precios hedónicos, que permiten identificar rasgos diferenciales en los ámbitos económico, social y espacial y su incidencia en el valor inmobiliario. También se ha sistematizado un proceso de valoración territorial a través del análisis del concepto de vulnerabilidad estructural, entendido como una situación de fragilidad debida a circunstancias tanto sociales como económicas, tanto actual como de tendencia en el futuro. Actualmente, esta estructura de demanda de segunda residencia y servicios ha mostrado su fragilidad y ha bloqueado el desarrollo económico de la zona al caer drásticamente la inversión en el sector inmobiliario por la crisis global de la deuda. El proceso se ha agravado al existir un tejido industrial marginal al que no se ha derivado inversiones importantes y un abandono progresivo de las explotaciones agropecuarias. El modelo turístico no sería en sí mismo la causa del bloqueo del desarrollo económico comarcal, sino la forma en que se ha implantado en la Costa Blanca, con un consumo del territorio basado en el corto plazo, poco respetuoso con aspectos paisajísticos y medioambientales, y sin una organización territorial global. Se observa cómo la vinculación entre índices de vulnerabilidad y valor inmobiliario no es especialmente significativa, lo que denota que las tendencias futuras de fragilidad no han sido incorporadas a la hora de establecer los precios de venta del producto inmobiliario analizado. El valor muestra una clara dependencia del sistema de asentamiento y conservación de las áreas medioambientales y un claro reconocimiento de tipologías propias del medio rural aunque vinculadas al sector turístico. En la actualidad, el continuo descenso de la demanda turística ha provocado una clara modificación en la estructura poblacional y económica. Al incorporar estas modificaciones a los modelos especificados podemos comprobar un verdadero desmoronamiento de los valores. Es posible que el remanente de vivienda construida actualmente vaya dirigido a un potencial comprador que se encuentra en retroceso y que se vincula a unos rasgos territoriales ya no existentes. Encontrar soluciones adaptables a la oferta existente, implica la viabilidad de renovación del sistema poblacional o modificaciones a nivel económico. La búsqueda de respuestas a estas cuestiones señala la necesidad de recanalizar el desarrollo, sin obviar la potencialidad del ámbito. SUMMARY One of the main lines of research regarding the urban economy focuses on the behavior of the real estate market and its relationship to territorial structure. Within this context, one of the most important themes involves considering the significance of urban property value and dealing with its variability, particularly given the significant role of the real estate market in Spain, both in the past and present. The main objective of this study is to identify those factors linked to location, which explain the formation of property values and justify their variability. Defining this process requires carrying out an evaluation on a territorial scale, establishing the socioeconomic, environmental and urban planning factors that constitute urban development and influence the demand for housing, thereby defining the processes by which their value is established. The analysis targets residential real estate values in coastal areas where pressure from the tourism industry has prompted large-scale transformations. Therefore, the focal point of this study is an area known as Vega Baja del Segura, which is located on the Spanish Mediterranean coast in southern Alicante (province). Characterized by its scenic and ecological diversity, this area has historically maintained a clear distinction between urban and rural spaces. This dichotomy has drastically changed in past decades due to the large increase in population attributed to the tourism and real estate markets – factors which have had a direct effect on property values. The development of this area provides a clear example of the expansionary policies which have affected the housing market on the coast of Spain during the past two decades, resulting in a large increase in suburban development. Understanding the territorial framework has made it possible to carry out a spatial variability analysis through massive data processing, as well as an econometric analysis that determines the factors that are evaluated positively and negatively by potential buyers. These relationships enable us to establish different mathematical systems based on hedonic pricing models that facilitate the identification of differential features in the economic, social and spatial spheres, and their impact on property values. Additionally, a process for land valuation was established through an analysis of the concept of structural vulnerability, which is understood to be a fragile situation resulting from either social or economic circumstances. Currently, this demand structure for second homes and services has demonstrated its fragility and has inhibited the area’s economic development as a result of the drastic fall in investment in the real estate market, due to the global debt crisis. This process has been worsened by the existence of a marginal industrial base into which no important investments have been channeled, combined with the progressive abandonment of agricultural and fishing operations. In and of itself, the tourism model did not inhibit the area’s economic development, rather it is the result of the manner in which it was implemented on the Costa Brava, with a land consumption based on the short-term, lacking respect for landscape and environmental aspects and without a comprehensive organization of the territory. It is clear that the link between vulnerability indexes and property values is not particularly significant, thereby indicating that future fragility trends have not been incorporated into the problem in terms of establishing the sale prices of the analyzed real estate product in question. Urban property values are clearly dependent on the system of development and environmental conservation, as well as on a clear recognition of the typologies that characterize rural areas, even those linked to the tourism industry. Today, the continued drop in tourism demand has provoked an obvious modification in the populational and economic structures. By incorporating these changes into the specified models, we can confirm a real collapse in values. It’s possible that the surplus of already-built homes is currently being marketed to a potential buyer who is in recession and linked to certain territorial characteristics that no longer exist. Finding solutions that can be adapted to the existing offer implies the viability of renewing the population system or carrying out modifications on an economic level. The search for answers to these questions suggests the need to reform the development model, without leaving out an area’s potentiality.

Formação de preços: uma investigação sobre os atributos envolvidos na definição de preços de produtos de vestuário

Este estudo visa compreender a relação entre os atributos intrínsecos e extrínsecos do produto calça jeans e o seu preço no varejo, tendo como objetivo específico analisar a influência separadamente dos atributos intrínsecos e extrínsecos sobre os preços. Para tanto, utiliza-se da teoria de atributos proposta por Lancaster (1966) e dos métodos de preços hedônicos propostos por Rosen (1974), por meio dos quais é possível observar a importância dos pacotes de atributos intrínsecos e extrínsecos sobre os preços, bem como observar a constituição de pacotes de atributos para diferentes perfis econômicos de consumidores. Foram analisadas 12 categorias de atributos sendo 5 de atributos intrínsecos e outras 7 de atributos extrínsecos. A coleta de dados foi realizada por meio de observação e a pesquisa foi realizada no período de 01 de julho a 31 de julho de 2015 nos maiores shoppings centers e principais lojas de ruas de São Paulo. A partir dos dados coletados, foram realizadas regressão múltipla e a regressão quantílica. A regressão múltipla apresentou o R2 de 58%, nessa análise os principais atributos que influenciam são: loja premium, venda assistida, origem da loja, tamanho da loja (megaloja), tamanho da loja (ampla), lavagem destroyed, resina, modelo flare, lavagem dirty, localização da loja (rua ou shopping), complementos, modelo skinny insumos elastano e poliéster. A regressão quantílica proporciou a análise para 10% das calças mais caras e para os 10% das calças mais baratas. Para as calças mais caras o R2 é de 45% para as calças mais caras há mais atributos extrínsecos do que atributos do produto interferindo no preço, são eles: os insumos poliéster e elastano, lavagem e resinagem, origem da marca da loja, posicionamento da marca, venda assistida, localização da loja, cartão de crédito - private label (nesse caso influenciando negativamente), e tamanho da loja, todos extrínsecos ao produto, se mostraram relevantes para o processo de precificação das calças jeans mais caras observadas nesse estudo. Já para as calças mais baratas, com R2 de 27%, parece haver um equilíbrio entre o número de variáveis intrínsecas e extrínsecas que interferem no preço das calças jeans mais baratas, pois somente a modelagem (atributo intrínseco) e cartão private label (atributo extrínseco) parecem não interferir na precificação. Concluiu-se que há mais atributos extrínsecos que influenciam o preço da calça jeans no varejo.

The Valuation of Agricultural Land and the Influence of Government Payments. Factor Markets Working Paper No. 10, December 2011

This study gives an overview of the theoretical foundations, empirical procedures and derived results of the literature identifying determinants of land prices. Special attention is given to the effects of different government support policies on land prices. Since almost all empirical studies on the determination of land prices refer either to the net present value method or the hedonic pricing approach as a theoretical basis, a short review of these models is provided. While the two approaches have different theoretical bases, their empirical implementation converges. Empirical studies use a broad range of variables to explain land values and we systematise those into six categories. In order to investigate the influence of different measures of government support on land prices, a meta-regression analysis is carried out. Our results reveal a significantly higher rate of capitalisation for decoupled direct payments and a significantly lower rate of capitalisation for agri-environmental payments, as compared to the rest of government support. Furthermore, the results show that taking theoretically consistent land rents (returns to land) and including non-agricultural variables like urban pressure in the regression implies lower elasticities of capitalisation. In addition, we find a significant influence of the land type, the data type and estimation techniques on the capitalisation rate.

The Impact of Light Rail Transit-Oriented Development on Residential Property Value in Seattle, WA

Thesis (Master's)--University of Washington, 2016-06

Pricing Automobile Fuel Economy : A New Hedonic Approach

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