Spatial Heterogeneity in Hedonic Price Effects for Lake Water Quality

Kristen Swedberg, Diego S. Cardoso, Adriana Castillo-Castillo, Saleh Mamun, Kevin J. Boyle, Christoph Nolte, Michael Papenfus, and Stephen Polasky. (Forthcoming) Land Economics. (paper)

Abstract This study uses Zillow’s ZTRAX property transaction database to investigate variation in hedonic price effects of water clarity on single-family houses throughout the United States. We consider five spatial scales and estimate models using different sample selection criteria and model specifications. Our results indicate considerable spatial heterogeneity both within and across the four U.S. Census regions. However, we also find heterogeneity resulting from different types of investigator decisions, including sample selection and modeling choices. Thus, it is necessary to use practical knowledge to consider the limits of market areas and to investigate the robustness of estimation results to investigator choices.