Valuation of Climate Related Natural Amenities in Property Markets
Residential property markets reflect the values people assign to environmental amenities. In particular, such values can be examined through hedonic price models. For example, these models can be used to quantify the economic value of specific measures of weather that contribute to a desirable climate. Previous studies have treated this issue witha simplified climate mildness index. However, this approach fails to provide the information needed to relate potential changes in average summer temperature, precipitation and humidity to changes in property values across U.S. regions. This study will focus on quantifying the impact of specific climate characteristics on property values in a more precise manner.