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The puzzling heterogeneity of amenity capitalization effects on land markets
Author(s) -
Wu Wenjie,
Dong Guanpeng,
Zhang Wenzhong
Publication year - 2017
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/pirs.12186
Subject(s) - capitalization , amenity , spatial heterogeneity , economics , econometric model , land values , economic geography , land price , land use , land development , natural resource economics , hedonic pricing , spatial dependence , government (linguistics) , econometrics , geography , agricultural economics , ecology , finance , philosophy , linguistics , statistics , mathematics , biology
Government‐funded urban amenities provide significant values to land markets. This paper uses spatial econometric techniques to recover the puzzling heterogeneity in capitalized values of local amenities such as higher education facilities, transport and environmental amenities. On top of its policy implications, this paper differentiates between non‐spatial models and spatial models to allow spatially varying marginal‐price estimates and reflect the subtle ways that land markets capitalize local amenities. Our results provide heterogeneous estimates of capitalized amenity values that would affect land development, illustrating the linkage between government‐funded amenities and the intensity of land development.