Estimation of Spatial Association Between Housing Price and Local Environmental Amenities in Kolkata, India Using Hedonic Local Regression

Abstract

ABSTRACTThe economic valuation of local environmental amenities (LEA) cannot be overlooked as it is useful for land use and environmental planning. Only a limited guideline is available on how economic valuation should be used in spatial planning. Urban planner and policymakers largely ignore the value of the LEA. The given study has been conducted in the city of Kolkata in India and addresses the value of LEA based on hedonic price model. Since traditional methods are inadequate to show how spatial heterogeneity exists in explanatory variables, locally weighted hedonic regressions are employed instead of global hedonic regression. It minimizes the residential dependency and captures spatial heterogeneity. To serve the purpose, this study used LULC data 2001 and 2011 and processed environmental and infrastructural attributes. Estimation shows that environmental and land use attributes are location specific and that there is a significant association with housing price. Also, township development and transportation services are significantly associated with housing price. These findings should be useful to policymakers.