Ecosystems and the spatial morphology of urban residential property value: a multi-scale examination in Finland

Votsis, Athanasios (2014): Ecosystems and the spatial morphology of urban residential property value: a multi-scale examination in Finland.

Abstract

This paper provides evidence for the spatial effects of ecosystems on value formation and differentiation in the urban residential property market. An amenity-based location theory is used in conjunction with hedonic function estimations from the Finnish cities of Helsinki, Espoo and Pori to distinguish between two different ways that ecosystems influence market value: a citywide spatial equilibrium and an additional layer of micro-scale fragmentation. The effect across spatial scales is complemented by two forms of distance decay: a logarithmic decay and a linear dependence on distance to the city centre. Lastly, the estimated marginal values exhibit noticeable temporal variation, even after using de-trended prices. The results highlight the structural role of the ecosystem in the housing market and suggest that the effect of ecosystem services is clearly conditional on the spatiotemporal context, with a visible degree of selectivity to specific services. It is also evident that a realistic understanding of the role of the ecosystem on property value must assess its effects as spatial bundles of services rather than singular flows of one service at a time.

• Item Type: MPRA Paper
• Language: English
• Keywords: urban ecosystems; spatial effects; residential property value
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C31 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions ; Social Interaction Models; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R31 - Housing Supply and Markets

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