The Study On Air Quality Valuation Based On The Hedonic Price Model

Based on the panel data of prefecture-level cities in China during 2010-2012,the paper studies the impact of urban air quality on housing prices by using the hedonic price model and estimates the marginal implicit price of air quality as the basis for the assessment of the economic value of air quality.The regression model takes the average sales price of urban comodity residential as the dependent variable,and the air quality and other characteristics of housing as the explanatory variables.The air quality indicators uses SO2 and PM10 respectively.The regression results show that for reducing one unit of SO2 concentration,the housing price increases by 20.64 yuan per square meter,which is equivalent to 0.50%of the average unit sales price over the same period;for reducing one unit of PM10 concentration,the housing price increases by 14.47 yuan per square meter,which is equivalent to 0.35%of the average unit sales price over the same period.In order to make a more comprehensive and accurate assessment of the economic value of air quality,the paper use the spatial effects and group regression.In spatial econometric analysis,0-1 adjacency matrix and economic distance matrix are used as spatial weight matrices respectively in the spatial autoregression models.The regression results by using the economic distance matrix as the weights show that for reducing SO2 concentration by one unit,the marginal effect on housing prices is increased by 15.97 yuan per square meter.And for PM10 decreasing by one unit,the marginal effect on housing prices is increased by 11.18 yuan per square meter.This value accounte for 0.39%and 0.27%of the average sales price of per unit of housing over the same period respecticely.By grouping the samples on regional economic development levels and industrialization levels separately,the results of grouped regression show that the impact of air pollution on urban housing prices increases with the development of regional economic.That is,the negative marginal effect of air pollution on housing prices is higher in areas with relatively high levels of economic development.With the increase of industrialization levels,the impact of air pollution on urban housing prices is decrease instead.That is,the marginal effect of air pollution on housing prices is smaller in areas with relatively high industrialization levels.Further,the paper select Xiamen city as an example and compare it with the results estimated with the national data.The regression model are based on the cross-sectional data of Xiamen’s second-hand commodity residential announced on the chain’s website.The marginal effects of SO2 and PM10 on housing prices in Xiamen can be obtained by using the spatial hedonic price model.The results show that impacts of SO2 and PM10 on the average residential housing prices of Xiamen are not significant.