Willingness to Pay for Public Park, Waste Disposal and Wide Roads: Hedonic Price Model

Abstract

Neighborhood amenities and household characteristics are an important determinant of property value. Since these attributes is to examine how their presence or absence affects the housing market and house prices. The value of an environmental amenity thus, can be considered as the additional price at which a property will sell due to the presence of that amenity. There, however, seems to be a little disagreement about the fact that environmental amenities add up to the value of property as a whole but to specify exactly which environmental amenities and the extent to which they influence the prices of the property is less definite. Drawing upon the literature and conducting unstructured interviews from property dealers and house hold, three basic neighborhood characteristics i.e. the presence of waste disposal system, distance to nearest public park and presence of wide roads in the neighborhood have been analyzed with rents through hedonic property model. The results show that the presence of these attributes tends to increase the house rents with significant relationships.

Keywords: Hedonic price model, Environmental amenity.