Distinctively different: a new approach to valuing architectural amenities

Ahlfeldt, Gabriel M. ORCID: 0000-0001-5664-3230 and Holman, Nancy ORCID: 0000-0002-4536-5092 (2018) Distinctively different: a new approach to valuing architectural amenities. The Economic Journal, 128 (608). 1 - 33. ISSN 0013-0133

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Abstract

We propose a method to estimate the capitalised value of the architectural design quality of an area. 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 48 conservation area neighbourhoods in England in which we analyse around 7900 property transactions and interview more than 500 residents. We find a capitalisation effect of about 6.6% (£16k) associated with a one standard deviation increase in our index of distinctive design. Our results suggest that this effect is at least partially driven by architectural externalities.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14680297
Additional Information:	© 2016 Royal Economic Society
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use H Social Sciences > HF Commerce K Law > KD England and Wales
JEL classification:	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
Date Deposited:	27 Apr 2016 09:31
Last Modified:	01 Nov 2024 05:29
Funders:	Suntory and Toyota International Centres for Economics and Related Disciplines
URI:	http://eprints.lse.ac.uk/id/eprint/66241

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