Abstract:
Environmental services refer to qualitative
functions of natural non-produced assets of land, water and
air (including related ecosystem) and their biota, which implies
natural environment providing particular important uses or
benefits that can be captured under the concept of “services.”
Our objective is to analyze the benefits associated with such
environmental services in order to make them more visible.
The hedonic pricing method uses the value of a surrogate good
or service to measure the implicit price of a non-market good.
The basic idea of the hedonic pricing method is that the price
of a market good is related to its characteristics or the services
it provides rather than the good itself. This article focuses on
assessing residential property rate influenced by environmental
services by applying hedonic pricing model. It is most
commonly applied to variations in housing prices that reflect
the value of local environmental attributes. The paper defines
Hedonic Pricing method (HPM) and its methodology. Data
required that influences the residential property rates will be
collected and are analyzed using regression analysis which
relates to statistically estimate a function that relates property
values to the property characteristics, including the distance to
open space. Thus, the effects of different characteristics on
price can be estimated. The results can be used to evaluate the
variations of property rates for small change in characteristics
holding all other characteristics constant. Price prediction
model is than prepared.
Description:
Keywords—Environmental services, Hedonic Pricing
method, implicit price, surrogate good
