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Distinctively different: a new approach to valuing architectural amenities

Ahlfeldt, Gabriel M. and Holman, Nancy (2015) Distinctively different: a new approach to valuing architectural amenities. CESifo Working Paper Series, 5521. The London School of Economics and Political Science, Department of Geography and Environment, London, UK.

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Abstract

We propose a method to estimate the capitalized value of the architectural design quality of a neighbourhood. Our economic design premium is identified by spatially differentiating property prices and design quality within neighbourhoods and comparing the differences across neighbourhoods. We apply our method to 47 conservation area neighbourhoods in England in which we analyse around 7900 property transactions and interview more than 500 residents. We find a capitalization effect of about 25.4% (£38.7k) associated with a one-step increase on a five-step scale ranging from not at all-distinctive to very distinctive. Our results suggest that this effect is at least partially driven by an architectural externality.

Item Type: Monograph (Working Paper)
Additional Information: © 2015 The Authors
Library of Congress subject classification: H Social Sciences > HT Communities. Classes. Races
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Identification Number: 5521
Date Deposited: 14 Apr 2015 11:17
URL: http://eprints.lse.ac.uk/61548/

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