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 the formation and differentiation of urban housing prices. The study estimates spatial hedonic functions on data from the Finnish cities of Helsinki, Espoo and Pori in order to understand the behavior of natural land uses as hedonic attributes from citywide to micro spatial scales. The results indicate that ecosystems enter consistently the hedonic function as spatial scales progress; a certain hierarchical logic can also be discerned in the appearance of new attributes from one spatial scale to another. Vertical variation across spatial scales is complemented by two horizontal forms of distance decay in each scale: a logarithmic decay of per m2 capitalization of some amenities when moving away from the source, and a linear dependence of the implicit price of other amenities on distance to the city center. Lastly, the marginal values exhibit notable temporal variation, even after using de-trended prices. The results highlight the structural, or consistent, role of ecosystems in the housing market and suggest that the valuation of ecosystem services depends on the spatiotemporal context, that is, the housing market is selective about these services.

• 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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