Environmental amenities and subjective well-being : testing the validity of hedonic pricing

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Title: Environmental amenities and subjective well-being : testing the validity of hedonic pricing
Authors: Brereton, Finbarr
Clinch, J. Peter
Ferreira, S. (Susana)
Permanent link: http://hdl.handle.net/10197/888
Date: Jun-2006
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
Copyright (published version): Copyright Finbarr Brereton, J. Peter Clinch, and Susana Ferreira (2006)
Keywords: Hedonic regressions;Subjective well-being;Quality of life;Amenities;Location-specific factors;Compensating differentials
Subject LCSH: Well-being
Social ecology
Human beings--Effect of environment on
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geography, Planning and Environmental Policy Working Papers & Policy Briefs

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