Unearthing the value of wet markets from urban housing prices: Evidence from Beijing, China

Abstract

Wet markets, recently thrust into the limelight during the coronavirus pandemic, play a necessary role in daily life in Asia. Yet, the value of wet markets has not ever been sufficiently explored. While an increasing body of work has studied the implicit value of urban public amenities through the hedonic price model and traditional measurements of accessibility and density, the subjective perceptions of amenities have been neglected, specifically for consumption amenity. This is especially the case with wet markets: traditional approaches are unable to capture their comprehensive effects. By employing data on Beijing housing transactions in 2019 and online review scores of wet markets, we reduce this knowledge gap by exploring both the amenity and dis-amenity effects of wet markets and capturing the objective and subjective perspectives. Our results indicate a nonlinear relationship between wet market accessibility and urban housing prices. Considering the perceived quality of wet markets, this paper further indicates that housing prices near high-scoring wet markets appreciate while housing prices depreciate near low-scoring markets. Interestingly, the negative influence of low-scoring markets is statistically larger than the positive influence of high-scoring wet markets. Taking the housing price as a reflection of an owner's wealth and income level, we argue that high-income dwellers tend to pay more for perceived quality than for convenience. Our findings, therefore, offer new and refined insights for scholars and urban planning decision-makers.