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A combined site proximity and recreation index approach to value natural amenities: An example from a natural resource management region of Murray-Darling Basin

Citation

Tapsuwan, S and Hatton MacDonald, D and King, D, A combined site proximity and recreation index approach to value natural amenities: An example from a natural resource management region of Murray-Darling Basin, Journal of Environmental Management, 94, (1) pp. 69-77. ISSN 1095-8630 (2012) [Refereed Article]

Copyright Statement

Copyright 2011 Elsevier

DOI: doi:10.1016/j.jenvman.2011.07.003

Abstract

This paper presents a hedonic property price model of rural land in a natural resource management region of the Murray-Darling Basin in Australia. In traditional hedonic models, the marginal value of environmental amenities is estimated using distance to or size of the environmental asset. The approach applied in this study offers the potential for a richer set of information, where environmental assets are described in terms of their ‘recreational attractiveness’. The level of recreational attractiveness is represented as latent variables that are based on park facilities and recreational activities offered at each site. For a property in the study area that is 1 km away from the River Murray, moving half a kilometre closer will increase the property price by $245,000, holding every other variable constant at the mean. This value is magnified by $27,000 if the house is in an area where there is high river recreational attractiveness and drops by $14,000 if river recreational attractiveness is low. By including recreational quality indices in a typical hedonic framework that is corrected for spatial dependency, the model is able to capture how individuals value environmental amenities around their homes based on the site’s natural characteristics as well as recreational services.

Item Details

Item Type:Refereed Article
Research Division:Economics
Research Group:Applied Economics
Research Field:Environment and Resource Economics
Objective Division:Environment
Objective Group:Environmental and Natural Resource Evaluation
Objective Field:Economic Incentives for Environmental Protection
UTAS Author:Hatton MacDonald, D (Associate Professor Darla Hatton MacDonald)
ID Code:103162
Year Published:2012
Web of Science® Times Cited:13
Deposited By:TSBE
Deposited On:2015-09-23
Last Modified:2015-10-09
Downloads:0

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