Hostname: page-component-76fb5796d-x4r87 Total loading time: 0 Render date: 2024-04-28T12:07:27.380Z Has data issue: false hasContentIssue false
  • English
  • Français

Marginal Price of Lake Recreation and Aesthetics: An Hedonic Approach

Published online by Cambridge University Press:  28 April 2015

Notie H. Lansford Jr.  and
Lonnie L. Jones
Notie H. Lansford Jr.
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater
Lonnie L. Jones
Affiliation:
Department of Agricultural Economics, Texas A&M University, College Station
Get access

Abstract

Efficient allocation of water requires knowledge of water's value in both consumptive and nonconsumptive uses. This study estimates the marginal value of water in lake recreational and aesthetic (RA) use. An hedonic price equation (employing the Box-Cox functional form) indicates lake front location, distance to lake, and scenic view are significant RA characteristics of housing. Water front properties command a premium price for the private access they offer. Beyond the water front, the marginal RA price falls rapidly with increasing distance, becoming asymptotic to some minimum. Twenty-two percent of housing price is found to be attributable to the RA component.

Keywords

aestheticBox-Coxhedonichousinglakenonmarketrecreationwater
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 27 , Issue 1 , July 1995 , pp. 212 - 223
Copyright
Copyright © Southern Agricultural Economics Association 1995

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bender, Bruce, Gronberg, Timothy, and Hwang, Hae-Shin, Choice of Functional Form and the Demand for Air Quality, Rev. Econ. and Statist. 62, 638–43, 1980.CrossRefGoogle Scholar
Box, G. and Cox, D., An Analysis of Transformations, J. Roy. Stat. Soc. Ser. B 26, 211–43, 1964.Google Scholar
Brown, Gardner M. and Pollakowski, Henry O.. Economic Valuation of Shoreline, Rev. Econ. and Statist. 59, 272–78, 1977.CrossRefGoogle Scholar
Breusch, T. S. and Pagan, A. R., A Simple Test for Heteroscedasticity and Random Coefficient Variation, Econometrica 47, 1287–94, 1979.CrossRefGoogle Scholar
Corey, Art, Travis Central Appraisal District Chief Appraiser, Personal Conversation, 1991.Google Scholar
Cropper, Maureen L., Deck, Leland B., and McConnell, Kenneth E., On the Choice of Functional Form for Hedonic Price Functions, Rev. Econ. and Statist. 70, 668–75, 1988.CrossRefGoogle Scholar
Dornbusch, David M. and Barrager, Stephen M., Benefit of Water Pollution Control on Property Values, Washington, D.C: U.S. Environmental Protection Agency, (EPA-600/5-73-005) October 1973.Google Scholar
Gibbons, Diana C, The Economic Value of Water, Washington, D.C: John Hopkins University Press for Resources for the Future, 1987.Google Scholar
Godfrey, Leslie G. “Testing for Multiplicative Heteroskedasticity.” J. Econometrics 8(1978):227–36.CrossRefGoogle Scholar
Goodman, Allen C “Hedonic Prices, Price Indices, and Housing Markets.” J. Urban Econ. 5(1978):471–84.CrossRefGoogle Scholar
Halvorsen, Robert and Pollakowski, Henry O.. “Choice of Functional Form for Hedonic Price Equations.” J. Urban Econ. 10(1981):37–49.CrossRefGoogle Scholar
Harvey, A. C. “Estimating Regression Models with Multiplicative Heteroscedasticity.” Econometrica 44(1976):461–65.CrossRefGoogle Scholar
Lansford, Notie H Jr. “Recreational and Aesthetic Value of Lakes Reflected by Housing Prices: An Hedonic Approach.” Ph.D. dissertation, Texas A&M University, 1991.Google Scholar
LCRAa, Lower Colorado River Authority. Lake Travis Average Elevations, Austin, Texas, unpublished table.Google Scholar
LCRAb, Lower Colorado River Authority. Water Management Plan for the Lower Colorado River, Volume I, Policy and Operations, Austin, Texas, undated.Google Scholar
Milon, J. Walter, Gressel, Jonathan, and Mulkey, David. “Hedonic Amenity Valuation and Functional Form Specification.” Land Econ. 60(1984):378–87.CrossRefGoogle Scholar
Nuckles, Jim. Travis Central Appraisal District Director of Real Property Appraisal. Personal Conversation. 1991.Google Scholar
Ohsfeldt, Robert L. “Implicit Markets and the Demand for Housing Characteristics.” Regional Science and Urban Econ. 18(1988):321–43.CrossRefGoogle Scholar
Ozuna, Teofilo Jr. “Functional Form and Welfare Measures in Truncated Recreation Demand Models.” Ph.D. dissertation, Texas A&M University, 1989.Google Scholar
Rosen, Sherwin. “Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition.” J. Polit. Econ. 82(1974):34–55.CrossRefGoogle Scholar
Spitzer, John J. “A Primer on Box-Cox Estimation.” Rev. Econ. and Statist. 64(1982):307–13.CrossRefGoogle Scholar
Spitzer, John J. “Variance Estimates in Models with the Box-Cox Transformation: Implications for Estimation and Hypothesis Testing.” Rev. Econ. and Statist. 66(1984):645–52.CrossRefGoogle Scholar
Welcome, Paul. Travis Central Appraisal District Deputy Chief Appraiser. Personal Conversation.Google Scholar
White, Halbert. “A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity.” Econometrica 48(1980):817–38.CrossRefGoogle Scholar
Zarembka, Paul. Economic Theory and Mathematical Economics, ed. Zarembka, Paul. New York: Academic Press, 1974.Google Scholar