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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. SERC discussion papers, SERCDP0171. Spatial Economics Research Centre, 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 (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/
Additional Information: © 2015 The Authors
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
N Fine Arts > NA Architecture
Journal of Economic Literature Classification System: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory
D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
R - Urban, Rural, and Regional Economics > R5 - Regional Government Analysis > R52 - Land Use and Other Regulations
Sets: Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Identification Number: SERCDP0171
Funders: Economic and Social Research Council , Department for Business, Innovation & Skills, Welsh Government
Date Deposited: 25 Nov 2015 11:47
URL: http://eprints.lse.ac.uk/64506/

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