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Environmental amenities and subjective well-being : testing the validity of hedonic pricing
Date Issued
2006-06
Date Available
2009-02-19T17:23:59Z
Abstract
This paper proposes a subjective well-being approach to test the equilibrium condition implicit in hedonic pricing. Contrary to the conclusions of previous studies, we show that both approaches are not complementary but, rather, they are alternative ways of computing implicit prices of environmental amenities. They are equivalent when the equilibrium condition holds but, in the absence of such equilibrium, only the subjective well-being approach is theoretically correct. In an empirical application, we find that (i) the total impact of location-specific amenities on self-reported well-being is not fully captured through compensating differentials in labor and housing markets, indicating that implicit prices derived using the hedonic approach would be incorrect and thus suggesting caution in its application, and (ii) environmental factors are as important as the most critical socio-economic and socio-demographic factors in explaining subjective well-being.
Type of Material
Working Paper
Publisher
University College Dublin. Planning and Environmental Policy
Series
Planning and Environmental Policy Research Series
PEP/06/03
Copyright (Published Version)
Copyright Finbarr Brereton, J. Peter Clinch, and Susana Ferreira (2006)
Subject – LCSH
Well-being
Social ecology
Human beings--Effect of environment on
Language
English
Status of Item
Not peer reviewed
ISSN
1649-5586
This item is made available under a Creative Commons License
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