Open AccessInternational Real Estate Review
Author(s) -
Qi Zhao,
Robert A. Simons,
Zhong Fen
Publication year - 2016
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100231
Subject(s) - incineration , real estate , externality , china , environmental science , property value , hedonic pricing , natural resource economics , agricultural economics , business , economics , geography , econometrics , engineering , finance , waste management , archaeology , microeconomics
Incineration plants and derelict industrial sites can have a number of adverse effects on the local environment and social welfare, including the diminution of property values. Although there are many incineration plants in China, there has been relatively little research done to quantify their negative externality effects. This study therefore considers the effects of three municipal incineration plants in Hangzhou city on residential property values. Hedonic pricing modeling of 2,200 residential transactions in over 70 multifamily buildings within ten kilometers of the incineration plants over a one year period including 2014 and 2015 is carried out. Generally, the results show that the neighboring properties show decreases in the initial listing price of up to 25%, declining until the effect is gone about three kilometers from the incinerator. The most consistent losses are approximately 10% between 1-2 kilometers from the nearest incinerator. These results are comparable to similar situations in the United States and Canada.