Volume 26, Issue 4 (Winter 2022)                   JPBUD 2022, 26(4): 3-33 | Back to browse issues page


XML Persian Abstract Print


Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Heidari Bahadori P, Hoseini M. The Effect of Air Pollution on Real-Estate Price in Tehran. JPBUD 2022; 26 (4) :3-33
URL: http://jpbud.ir/article-1-2035-en.html
1- Macro Systems Orientation, Institute for Management and Planning Studies, Tehran, Iran
2- Institute for Management and Planning Studies, Tehran, Iran , mo.hoseini@imps.ac.ir
Abstract:   (974 Views)
This paper investigates the effect of air pollution on real-estate price in Tehran for the period (2013-14) and (2018-19). By combining microdata of real-estate transactions for more than 50,000 units that are traded multiple times during the period of study, the pollution index is constructed for each house by using the air pollution index from various stations in Tehran. Using this dataset, the effect of different pollutants on house prices is estimated. The findings show that particulate matter (PM2.5 index) decreases house prices in Tehran, such that one standard deviation increase in the PM2.5 index reduces house price by 3.1 percent. Moreover, there is no significant effect of NO2 and CO pollutants, which can be due to their unobservability in air, their trivial instant effect on health, and the insignificance of these pollutants in determining the final index.
Full-Text [PDF 938 kb]   (299 Downloads)    
Type of Study: Research | Subject: Energy Economics, Environment and Natural Resources
Received: 2021/08/1 | Accepted: 2022/02/26 | ePublished: 2022/05/23

References
1. Aghapour Sabbagi, M. (2011). Evaluation Clean Air Effects on Tehran City Residential Houses Price in 2009. Iranian Journal of Health and Environment, 4(2), 213-222.
2. Anderson Jr, R. J., & Crocker, T. D. (1971). Air Pollution and Residential Property Values. Urban Studies, 8(3), 171-180. [DOI:10.1080/00420987120080391]
3. Anselin, L., & Le Gallo, J. (2006). Interpolation of Air Quality Measures in Hedonic House Price Models: Spatial Aspects. Spatial Economic Analysis, 1(1), 31-52. [DOI:10.1080/17421770600661337]
4. Anselin, L., & Lozano-Gracia, N. (2008). Errors in Variables and Spatial Effects in Hedonic House Price Models of Ambient Air Quality. Empirical Economics, 34(1), 5-34. [DOI:10.1007/s00181-007-0152-3]
5. Azmi, A. S. M., Azhar, R. F., & Nawawi, A. H. (2012). The Relationship between Air Quality and Property Price. Procedia-Social and Behavioral Sciences, 50(1), 839-854. [DOI:10.1016/j.sbspro.2012.08.086]
6. Bae, C. C. (1997). The Equity Impacts of Los Angeles' Air Quality Policies. Environment and Planning A, 29(9), 1563-1584. [DOI:10.1068/a291563]
7. Bajari, P., Fruehwirth, J. C., & Timmins, C. (2012). A Rational Expectations Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution. American Economic Review, 102(5), 1898-1926. [DOI:10.1257/aer.102.5.1898]
8. Bento, A., Freedman, M., & Lang, C. (2015). Who Benefits from Environmental Regulation? Evidence from the Clean Air Act Amendments. Review of Economics and Statistics, 97(3), 610-622. [DOI:10.1162/REST_a_00493]
9. Beron, K. J., Murdoch, J. C., & Thayer, M. A. (1999). Hierarchical Linear Models with Application to Air Pollution in the South Coast Air Basin. American Journal of Agricultural Economics, 81(5), 1123-1127. [DOI:10.2307/1244095]
10. Boonyanam, N. (2016). Loss of Value in House Properties due to Air Pollution in Map Ta Phut Industrial Area of Thailand. Applied Environmental Research, 38(3), 1-13. [DOI:10.35762/AER.2016.38.3.1]
11. Chattopadhyay, S. (1999). Estimating the Demand for Air Quality: New Evidence Based on the Chicago Housing Market. Land Economics, 75(1), 22-38. [DOI:10.2307/3146991]
12. Chay, K. Y., & Greenstone, M. (2005). Does Air Quality Matter? Evidence from the Housing Market. Journal of Political Economy, 113(2), 376-424. [DOI:10.1086/427462]
13. Esfahani, H., & Mahdavi Zafarghandi, S. (2017). Examining the Welfare Impacts of Environmental Policies for Importing Clean Technologies. The Journal of Planning and Budgeting, 22(1), 33-45.
14. Fadaee, M., & Motaffef, M. (2016). Strategic Interactions between a Fossil Fuel Cartel and a Coalition of Buyers: a Dynamic Approach. The Journal of Planning and Budgeting, 21(1), 105-122.
15. Freeman III, A. M. (1974). On Estimating Air Pollution Control Benefits from Land Value Studies. Journal of Environmental Economics and Management, 1(1), 74-83. [DOI:10.1016/0095-0696(74)90018-7]
16. Freeman, A. M. (1981). Hedonic Prices, Property Values and Measuring Environmental Benefits: A Survey of the Issues. In Measurement in Public Choice (pp. 13-32): Springer. [DOI:10.1007/978-1-349-05090-1_2]
17. Gonzalez, F., Leipnik, M., & Mazumder, D. (2013). How much are Urban Residents in Mexico Willing to Pay for Cleaner Air? Environment and Development Economics, 18(3), 354-379. [DOI:10.1017/S1355770X13000077]
18. Graves, P., Murdoch, J. C., Thayer, M. A., & Waldman, D. (1988). The Robustness of Hedonic Price Estimation: Urban Air Quality. Land Economics, 64(3), 220-233. [DOI:10.2307/3146246]
19. Hao, Y., & Zheng, S. (2017). Would Environmental Pollution Affect Home Prices? An Empirical Study Based on China's Key Cities. Environmental Science and Pollution Research, 24(31), 24545-24561. [DOI:10.1007/s11356-017-0073-4]
20. Harrison, D., & Rubinfeld, D. L. (1978a). The Air Pollution and Property Value Debate: Some Empirical Evidence. The Review of Economics and Statistics, 60(4), 635-638. [DOI:10.2307/1924261]
21. Harrison, D., & Rubinfeld, D. L. (1978b). Hedonic Housing Prices and the Demand for Clean Air. Journal of Environmental Economics and Management, 5(1), 81-102. [DOI:10.1016/0095-0696(78)90006-2]
22. Khorshiddoust, A. M. (2009). The Application of Hedonic Pricing Method in Estimating the Hidden Economic Value of Environment: The Case Study of Correlation between Public Services, Pollution, and the Housing Prices in Selected Areas of Tabriz. Journal of Environmental Studies, 35(51), 81-92.
23. Kim, C. W., Phipps, T. T., & Anselin, L. (2003). Measuring the Benefits of Air Quality Improvement: A Spatial Hedonic Approach. Journal of Environmental Economics and Management, 45(1), 24-39. [DOI:10.1016/S0095-0696(02)00013-X]
24. Komarova, V. (2009). Valuing Environmental Impact of Air Pollution in Moscow with Hedonic Prices. World Academy of Science, Engineering and Technology, 57(1), 319-326.
25. Lang, C. (2015). The Dynamics of House Price Responsiveness and Locational Sorting: Evidence from Air Quality Changes. Regional Science and Urban Economics, 52(1), 71-82. [DOI:10.1016/j.regsciurbeco.2015.02.005]
26. Li, H., Wei, Y. D., Yu, Z., & Tian, G. (2016). Amenity, Accessibility and Housing Values in Metropolitan USA: A Study of Salt Lake County, Utah. Cities, 59(1), 113-125. [DOI:10.1016/j.cities.2016.07.001]
27. Liu, X., Li, Q., Chand, S., & Sharpe, K. (2021). Effects of Air Quality on House Prices: Evidence from China's Huai River Policy. New Zealand Economic Papers, 55(1), 52-65. [DOI:10.1080/00779954.2020.1827014]
28. Mei, Y., Gao, L., Zhang, J., & Wang, J. (2020). Valuing Urban Air Quality: A Hedonic Price Analysis in Beijing, China. Environmental Science and Pollution Research, 27(2), 1373-1385. [DOI:10.1007/s11356-019-06874-5]
29. Neill, H. R., Hassenzahl, D. M., & Assane, D. D. (2007). Estimating the Effect of Air Quality: Spatial Versus Traditional Hedonic Price Models. Southern Economic Journal, 73(4), 1088-1111. [DOI:10.1002/j.2325-8012.2007.tb00819.x]
30. Nelson, J. P. (1978). Residential Choice, Hedonic Prices, and the Demand for Urban Air Quality. Journal of Urban Economics, 5(3), 357-369. [DOI:10.1016/0094-1190(78)90016-5]
31. Nourse, H. O. (1967). The Effect of Air Pollution on House Values. Land Economics, 43(2), 181-189. [DOI:10.2307/3145241]
32. Palmquist, R. B., & Israngkura, A. (1999). Valuing Air Quality with Hedonic and Discrete Choice Models. American Journal of Agricultural Economics, 81(5), 1128-1133. [DOI:10.2307/1244096]
33. Ramsey, D. D. (1976). A Note on Air Pollution, Property Values and Fiscal Variables. Land Economics, 52(2), 230-234. [DOI:10.2307/3145299]
34. Ridker, R. G., & Henning, J. A. (1967). The determinants of Residential Property Values with Special Reference to Air Pollution. The Review of Economics and Statistics, 49(2), 246-257. [DOI:10.2307/1928231]
35. Rosen, S. (1974). Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition. Journal of Political Economy, 82(1), 34-55. [DOI:10.1086/260169]
36. Salem, A. A., & Akaberi, T. M. (2018). Calculating the Willingness to Pay to Avoid of Pollution Harmful Effects by Using the Hedonic Price in Different Provinces of Iran. Quarterly Journal of Quantitative Economics, 15(2), 23-50.
37. Smith, V. K., & Huang, J. C. (1993). Hedonic Models and Air Pollution: Twenty-Five Years and Counting. Environmental and Resource Economics, 3(4), 381-394. [DOI:10.1007/BF00418818]
38. Smith, V. K., & Huang, J.-C. (1995). Can Markets Value Air Quality? A Meta-Analysis of Hedonic Property Value Models. Journal of Political Economy, 103(1), 209-227. [DOI:10.1086/261981]
39. Wieand, K. F. (1973). Air Pollution and Property Values: A Study of the St. Louis Area. Journal of Regional Science, 13(1), 91-95. [DOI:10.1111/j.1467-9787.1973.tb00380.x]
40. Yusuf, A. A., & Resosudarmo, B. P. (2009). Does Clean Air Matter in Developing Countries' Megacities? A Hedonic Price Analysis of the Jakarta Housing Market, Indonesia. Ecological Economics, 68(5), 1398-1407. [DOI:10.1016/j.ecolecon.2008.09.011]

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 International License.

© 2022 CC BY-NC 4.0 | Planning and Budgeting

Designed & Developed by : Yektaweb