The spatial effect of estuaries pollution on the housing rental market: evidence from South America

Estuaries are water bodies, many of which contribute to the sustainable development of cities. Many of them are considered natural landscapes, offering various recreational services to the population. However, estuary degradation is a common problem in developing countries. Ecuador, for example, has...

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Bibliographic Details
Published in:Environment and development economics 2021-02, Vol.26 (1), p.69-87
Main Authors: Zambrano-Monserrate, Manuel A., Ruano, Maria Alejandra
Format: Article
Language:English
Subjects:
Cadmium
Contamination
Creeks & streams
Developing countries
Estuaries
Estuarine pollution
Feces
Ghettos
Housing
Housing market
Housing prices
LDCs
Pollution
Pricing
Rivers
Sustainable development
Valuation methods
Water pollution
Water quality
Willingness to pay
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Summary:Estuaries are water bodies, many of which contribute to the sustainable development of cities. Many of them are considered natural landscapes, offering various recreational services to the population. However, estuary degradation is a common problem in developing countries. Ecuador, for example, has a significant problem with the pollution of its estuaries. Machala is one of the most affected cities due to the contamination of these water bodies. This issue has generated negative externalities in the housing market. Thus, our central hypothesis is that rental prices of houses are revalued as their distance from polluted estuaries increases. Using the hedonic pricing approach, our results confirm that the price of a residence increases by US$9.45 for every 100 m farther it is from the closest estuary. This amount constitutes approximately 5.25 per cent of the average rental value in Machala.
ISSN:1355-770X
1469-4395
DOI:10.1017/S1355770X20000194