Journal of Economics and Finance

, Volume 39, Issue 4, pp 782–806 | Cite as

Hedonic valuation of land protection methods: implications for cluster development

  • Robert W. Kling
  • T. Scott Findley
  • Emin Gahramanov
  • David M. Theobald


This study estimates a generalized spatial hedonic pricing model to assess how residential property values are impacted by inclusion within cluster developments and by proximity to various types of protected land. The estimated model simultaneously controls for the spatial dependence of residential housing prices and for the presence of spatial autocorrelation. The sample includes 4,008 single-family housing sales transactions within the non-urban portions of Larimer County in northern Colorado. The empirical framework accounts for topographical diversity across the study region, as well as distinguishing between several distinct types of publicly and privately protected land. The key findings of the study are: (i) proximity to national or state park land and to city or county open space has a significant positive impact on property values, while proximity to national forest land or to privately conserved land exhibits no significant effects; and, (ii) inclusion of a property within a cluster development decreases its value by 17 to 26 %. These findings are robust to different estimation techniques and model specifications, which suggests important considerations for policymakers who design development rules and alternative land protection measures aimed at preserving open space in non-urban areas.


Hedonic valuation Cluster development Open space Spatial dependence Spatial autocorrelation 

JEL Classifications

Q51 R14 R31 R38 


  1. Acharya G, Bennett LL (2001) Valuing open space and land-use patterns in urban watersheds. J Real Estate Financ Econ 22(2–3):221–237CrossRefGoogle Scholar
  2. Anderson ST, West SE (2006) Open space, residential property values, and spatial context. Reg Sci Urban Econ 36(6):773–789CrossRefGoogle Scholar
  3. Anselin L (1988) Spatial econometrics: methods and models. Kluwer, DordrechtCrossRefGoogle Scholar
  4. Blakely M (1991) An economic analysis of the effects of development rights purchases on land values in King County, Washington. M.S. thesis, Washington State UniversityGoogle Scholar
  5. Bolitzer B, Netusil NR (2000) The impact of open spaces on property values in Portland, Oregon. J Environ Manag 59(3):185–193CrossRefGoogle Scholar
  6. Burchell RW, Downs A, McCann B, Mukherji S (2005) Sprawl costs: economic impacts of unchecked development. Island Press, Washington, DCGoogle Scholar
  7. Cheshire P, Sheppard S (1989) British planning policy and access to housing: some empirical estimates. Urban Stud 26(5):469–485CrossRefGoogle Scholar
  8. Correll MR, Lillydahl JH, Singell LD (1978) The effects of greenbelts on residential property values: some findings on the political economy of open space. Land Econ 54(2):207–217CrossRefGoogle Scholar
  9. Ernst T, Wallace GN (2008) Characteristics, motivations, and management actions of landowners engaged in private land conservation in Larimer County Colorado. Nat Areas J 28(2):109–120CrossRefGoogle Scholar
  10. Geoghegan J (2002) The value of open spaces in residential land use. Land Use Policy 19(1):91–98CrossRefGoogle Scholar
  11. Geoghegan J, Wainger LA, Bockstael NE (1997) Spatial landscape indices in a hedonic framework: an ecological economics analysis using GIS. Ecol Econ 23(3):251–264CrossRefGoogle Scholar
  12. Geoghegan J, Lynch L, Bucholtz S (2003) Capitalization of open spaces into housing values and the residential property tax revenue impacts of agricultural easement programs. Agric Resour Econ Rev 32(1):33–45Google Scholar
  13. Irwin EG (2002) The effects of open space on residential property values. Land Econ 78(4):465–480CrossRefGoogle Scholar
  14. Irwin EG, Bockstael NE (2001) The problem of identifying land use spillovers: measuring the effects of open space on residential property values. Am J Agric Econ 83(3):698–704CrossRefGoogle Scholar
  15. Kim CW, Phipps TT, Anselin L (2003) Measuring the benefits of air quality improvement: a spatial hedonic approach. J Environ Econ Manag 45(1):24–39CrossRefGoogle Scholar
  16. Kitchen JW, Hendon WS (1967) Land values adjacent to an urban neighborhood park. Land Econ 43(3):357–360CrossRefGoogle Scholar
  17. Kline JD (2006) Public demand for preserving local open space. Soc Nat Resour 19(7):645–659CrossRefGoogle Scholar
  18. Lee C-M, Linneman P (1998) Dynamics of the greenbelt amenity effect on the land market—the case of the Seoul’s greenbelt. Real Estate Econ 26(1):107–129CrossRefGoogle Scholar
  19. LeSage J, Pace RK (2009) Introduction to spatial econometrics. Chapman & Hall/CRC Press, Boca RatonCrossRefGoogle Scholar
  20. Lutzenhiser M, Netusil NR (2001) The effect of open spaces on a home’s sales price. Contemp Econ Pol 19(3):291–298CrossRefGoogle Scholar
  21. Nelson AC (1988) An empirical note on how regional urban containment policy influences an interaction between greenbelt and exurban land markets. J Am Plan Assoc 54(2):178–184CrossRefGoogle Scholar
  22. Neumayer E, Plümper T (2010) Making spatial analysis operational: Commands for generating spatial-effect variables in monadic and dyadic data. Stat J 10(4):585–605Google Scholar
  23. Nickerson CG, Lynch L (2001) The effect of farmland preservation programs on farmland prices. Am J Agric Econ 83(2):341–351CrossRefGoogle Scholar
  24. Rosen S (1974) Hedonic prices and implicit markets: product differentiation in pure competition. J Polit Econ 82(1):34–55CrossRefGoogle Scholar
  25. Smith VK, Poulos C, Kim H (2002) Treating open space as an urban amenity. Resour Energy Econ 24(1–2):107–129CrossRefGoogle Scholar
  26. Taylor LO (2003) The hedonic method. In: Champ PA et al (eds) A primer on non-market valuation. Kluwer, Dordrecht, pp 331–393Google Scholar
  27. Theobald DM, Hobbs NT (2002) A framework for evaluating land use planning alternatives: protecting biodiversity on private land. Conserv Ecol 6(1):5Google Scholar
  28. Wallace GN, Theobald DM, Ernst T, King K (2008) Assessing the ecological and social benefits of private land conservation in Colorado. Conserv Biol 22(2):284–296CrossRefGoogle Scholar
  29. Weicher JC, Zerbst RH (1973) The externalities of neighborhood parks: an empirical investigation. Land Econ 49(1):99–105CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Robert W. Kling
    • 1
  • T. Scott Findley
    • 2
  • Emin Gahramanov
    • 3
  • David M. Theobald
    • 1
  1. 1.Colorado State UniversityFort CollinsUSA
  2. 2.Utah State UniversityLoganUSA
  3. 3.Deakin UniversityGeelongAustralia

Personalised recommendations