Valuation of landscape amenities: A hedonic pricing analysis of housing rents in urban, suburban and periurban Switzerland

Abstract

The hedonic pricing approach has been successfully applied to estimate the economic value of environmental amenities in urban settings, but the results for landscape variables remain relatively inconsistent across studies. Here, we use national-level data and an existing typology of communities to examine how land use and environmental amenities and disamenities affect rental prices across urban, suburban, periurban, and affluent communities in Switzerland. To make the analysis and the results as transparent as possible we examine largely a priori model specifications, and we systematically report and discuss the patterns of correlation among explanatory variables. Two-level models show that about 70 percent of the price variation is found at the apartment level and about 30 percent at the community level. Models for the different community types suggest that, although we include a sophisticated variable for central services, the centrality of location is not fully controlled in our models and thus picked up by correlated peripheral and central amenities such as open space, forest or urban parks. Analysis of these correlations allows us to qualify our results and present a revised set of relatively reliable estimates. Positive effects on rental prices are identified for views, various types of recreational infrastructure and vicinity of lakes, wetlands, undisturbed areas, nationally significant landscapes and cultural sites. Negative effects are found for several disamenities including road noise, railway noise, industries and power lines. We suggest that systematic hypothesis testing and reporting of correlations may contribute to consistent explanatory patterns in hedonic pricing estimates for landscape amenities.