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Hedonic property values and water quality: A meta-analysis of commodity, market, and methodological choices
Citation:
Heberling, Matthew, D. Guignet, AND M. Papenfus. Hedonic property values and water quality: A meta-analysis of commodity, market, and methodological choices. JOURNAL OF ENVIRONMENTAL MANAGEMENT. Elsevier Science Ltd, New York, NY, 352:119829, (2024). https://doi.org/10.1016/j.jenvman.2023.119829
Impact/Purpose:
We conduct a comprehensive review of studies that examine the effects of water quality on waterfront housing values. Our study goes beyond a narrative discussion because we use meta-analysis to quantitatively assess the literature based on the observations gathered from 29 unique hedonic studies. We include studies that used any objective measure of water quality and consider how study design and methodological choices affect the likelihood of finding a significant and theoretically consistent relationship. The purpose of our meta-analysis is not to promote hedonic modeling choices that lead to significant results; rather, we intend to provide practitioners and decision-makers with information to aid in the interpretation and application of hedonic model results.
Description:
This study quantitatively reviews the hedonic literature examining surface water quality to assess how attributes of the commodity, housing market, and methodological choices lead to variation in the significance and expected sign of the estimated property value effects (i.e., elasticities). We conduct a meta-analysis of 29 studies with 290 unique estimates, published or released between 1985 and 2017, and find evidence based on probit meta-regression models that some of the definitions and decisions made in primary studies do influence the estimated relationship between water quality and home prices. Our most robust evidence suggests that methodological choices (e.g., accounting for spatial dependence, or if the water quality measure was based on something other than in situ measurement) have a critical role in determining the likelihood of finding a significant and theoretically expected result; and perhaps most importantly, it is not always selections that reflect best practices that lead to this finding. This study can help identify potential concerns with data and modeling choices in the collective hedonic literature focused on water quality.
URLs/Downloads:
DOI: Hedonic property values and water quality: A meta-analysis of commodity, market, and methodological choices
https://pubmed.ncbi.nlm.nih.gov/38184876/