Valuation of Environmental Goods in Profit and Non-Profit Housing Sectors: Evidence from the Rental Market in the City of Zurich

Abstract

Summary This paper analyses the impact of electromagnetic pollution, noise and air pollution on the rent level for the aggregated and disaggregated market in the city of Zurich, Switzerland. Although there is no conclusive assessment about the health impacts of electromagnetic radiation people are nonetheless concerned about possible long term risks associated with the exposure. This risk perception may affect the price of dwellings located close to antenna. The regression results show that the environmental variables considered have the expected sign and are highly significant, with exception of the presence of an antenna and the air pollution for the non-profit submarket. However, the greatest part of the variation is explained by the structural variables.

Which factors capitalize into house prices? A Bayesian averaging approach

“…Estimations of the effects of environmental damage are common in capitalization literature: Portney (1981) looks at the effects of localized air pollution on home values in Pittsburgh. Ketkar (1992), Kiel (1995), and Brasington and Hite (2005) analyze the negative impact of hazardous waste sites while Baranzini and Ramirez (2005) focus on high noise levels and Banfi et al (2008) consider electromagnetic pollution. For the estimations we include a control for environmental damage as NO2 particles in microgram per cubic meter of air (NO2Pollution).…”

Using measured instead of perceived noise in hedonic models

“…Authors have processed data for low noise levels in different, often ad hoc, ways. For example,Bjørner (2004) limits the sample to households in Copenhagen exposed to noise levels between 55 and 75 dB(A) Banfi et al (2008). use road traffic noise levels in Zurich only for streets where noise limit values during the night have been exceeded 50 dB(A) and assign an exposure value of 50 dB(A) to all the buildings for which the measured noise level was not calculated.7 The statistical sub-sector is an intermediate territorial entity between the plot and the municipality.…”

Do Foreigners Pay Higher Rents for the Same Quality of Housing in Geneva and Zurich?

“…Baranzini and Ramirez, 2005;Baranzini and Schaerer, 2007) and Zurich markets (see e.g. Banfi, Filippini and Horehajova, 2008;Schaerer, Baranzini, Ramirez and Thalmann, 2007). We now turn to the variables related to discrimination and prejudice.…”