A semiparametric hedonic model for valuing wetlands

Abstract

A semiparametric hedonic price function is estimated to examine the effects of proximity to wetlands on property values using extensive wetland inventory and housing market data from Portland-Oregon, USA. The semiparametric method used in this study allows for estimation of the hedonic price function with flexible functional form and is computationally easier than most non-parametric models. Four general categories of wetlands – open water, emergent vegetation, forested and scrub shrub wetlands – are differentiated. The results indicate that proximity to open water wetlands has a positive association with property values, while the other types of wetlands have either a negative or insignificant relationship.

Acknowledgements

The author wishes to thank Brent Mahan of the US Army Corps of Engineers for making the wetland inventory and housing market data available. Steve Polasky and Carols Martins-Filho provided valuable assistance.