The impacts of pollution and exposure pathways on home values: A stated preference analysis

Guignet, Dennis

doi:10.1016/j.ecolecon.2012.02.033

Cited by 13 publications

(14 citation statements)

References 26 publications

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“…In general, stated preference methods have found that people are willing to pay less for a home when local environmental quality problems are disclosed, whether these problems be described in a purely qualitative fashion (Jenkins-Smith et al, 2002;Simons and WinsonGeideman, 2005) or quantitatively in terms of pollutant concentrations (Guignet, 2012). We therefore expect to find that people are willing to pay for a home at a location with cleaner air and a lower risk of dying.…”

Section: Background and Literature Reviewmentioning

confidence: 96%

Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK

Guignet

Alberini

2013

SSRN Journal

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Abstract:Hedonic property value models are often used to place a value on localized amenities and disamenities. In practice, however, results may be affected by (i) omitted variable bias and (ii) whether homebuyers and sellers are aware of, and respond to, the assumed environmental measure. In this paper we undertake an alternative stated preference (SP) approach that eliminates the potential for unobserved confounders and where the measure of environmental quality is explicitly presented to respondents. We examine how homeowners in the United Kingdom and Italy value mortality risk reductions by asking them to choose among hypothetical variants of their home that differ in terms of mortality risks from air pollution and price. To our knowledge this is the first stated preference study examining respondents' willingness to pay for properties using a quantitative and clearly specified measure of health risks.We find that Italian homeowners hold a value of a statistical life (VSL) of about €6.4 million, but UK homeowners tend to hold a much lower VSL (€2.1 million). This may be due to the fact that respondents in the UK do not perceive air pollution where they live to be as threatening, and actually live in cities with relatively low air pollution levels. Exploiting part of our experimental design, we find that Italian homeowners value a reduction in the risk of dying from cancer more than from other causes, but UK respondents do not hold such a premium. We also find that those who face higher baseline risks, due to higher air pollution levels where they live, hold a higher VSL, especially in the UK. In both countries, the VSL is twice as large among individuals who perceive air pollution where they live as relatively high.

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Section: Background and Literature Reviewmentioning

confidence: 96%

Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK

Guignet

Alberini

2013

SSRN Journal

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“…In general, SP methods have found that people are willing to pay less for a home when local environmental quality problems are disclosed, whether these problems be described in a purely qualitative fashion (10,12) or quantitatively in terms of pollutant concentrations. (13) We therefore expect to find that people are willing to pay a premium for a home at a location with cleaner air and a lower risk of dying. We wish to find out how much exactly they are willing to pay for each unit of risk reduction, and whether their willingness to pay depends on the cause of death (cancer or otherwise) and baseline risks.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

“…The survey sample included homeowners and renters, but in this article, we focus on the 1,591 and 1,477 respondents in Italy and the United Kingdom, respectively, who own their home. 13 In both countries, the respondents were drawn from the residents of cities selected to ensure geographical and air quality representativeness. The number of respondents from each city is shown in Table I.…”

Section: The Datamentioning

confidence: 99%

“…See Alberini andŠcasný (47) for details. 13 The original sample included 1,868 and 1,674 homeowners from Italy and the United Kingdom, respectively, but about 13% of respondents were disregarded because they did not seem to correctly understand probabilities based on earlier visual representations and screening questions. 14 All income figures are in 2010 PPP euro.…”

Section: The Datamentioning

confidence: 99%

“…Framing SP studies in the context of housing is a natural step in facilitating comparisons across hedonic and SP methods. Despite this, only a few SP studies have examined the value of environmental amenities (8,9) and disamenities (10)(11)(12)(13)(14) in the housing context.…”

Section: Introductionmentioning

confidence: 99%

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Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the United Kingdom

Guignet

Alberini

2014

Risk Analysis

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Hedonic models are a common nonmarket valuation technique, but, in practice, results can be affected by omitted variables and whether homebuyers respond to the assumed environmental measure. We undertake an alternative stated preference approach that circumvents these issues. We examine how homeowners in the United Kingdom and Italy value mortality risk reductions by asking them to choose among hypothetical variants of their home that differ in terms of mortality risks from air pollution and price. We find that Italian homeowners hold a value of a statistical life (VSL) of €6.4 million, but U.K. homeowners hold a much lower VSL (€2.1 million). This may be because respondents in the United Kingdom do not perceive air pollution where they live to be as threatening, and actually live in cities with relatively low air pollution. Italian homeowners value a reduction in the risk of dying from cancer more than from other causes, but U.K. respondents do not hold such a premium. Lastly, respondents who face higher baseline risks, due to greater air pollution where they live, hold a higher VSL, particularly in the United Kingdom. In both countries, the VSL is twice as large among individuals who perceive air pollution where they live as high.

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Housing Choice; The Application of Revealed and Stated Preference Approaches to Impacted Residential Property

Akinbogun

Aigbavboa

Gumbo

et al. 2020

Modelling the Socio-Economic Implications of Sustainability Issues in the Housing Market

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The impacts of pollution and exposure pathways on home values: A stated preference analysis

Cited by 13 publications

References 26 publications

Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK

Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK

Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the United Kingdom

Housing Choice; The Application of Revealed and Stated Preference Approaches to Impacted Residential Property

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