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Gulf Views: Toward a Better Understanding of Viewshed Scope in Hedonic Property Models

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Abstract

This study examines the influence of Gulf of Mexico views on residential home sales prices in Pinellas County, Florida. We utilize Light Detection and Ranging (lidar) data to construct four continuous measures of Gulf of Mexico views—the total view, the maximum view segment, the mean view segment, and proximity to view content. Our results illustrate that residential property owners have a higher marginal willingness-to-pay for larger total views and larger continuous view segments. Results also indicate that the proximity of homes to the view content influences view valuations.

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Notes

  1. These 2008 estimates are available for download from the National Ocean Economics Program < http://www.oceaneconomics.org>.

  2. For example, Benson et al. 1998 use four dummies for view (full, superior partial, good partial, and poor partial) to measure the impact of ocean, lake, and mountain views on property prices in Bellingham, Washington. Bourassa et al. (2004) use narrow, medium, and wide indicators of view to indicate the quality of a lake view on property values in Auckland, New Zealand.

  3. Benson et al. (1998) find that the premium for a full view (68%) for properties 0.1 miles from the coast falls to 31% at 2 miles away. Bourassa et al. (2004) estimate a “wide view” property premium of 59% at the coastline, falling to 14% at 2,000 meters from the coast.

  4. For example, Lake et al. (2000) analyze the visual impacts of road development on property prices. Using GIS to construct a Digital Terrain Model that measures the viewshed from each property in a sample of homes in Glasgow, Scotland, they find homes with roads visible from the front of the property have lower average property prices by 2.5 percent. Din et al. (2001) use GIS to estimate the influence of visible land area on property valuations.

  5. For each property, the IPVA measure captures the Gulf of Mexico view only. It does not capture other water views, such as inlets, canals, and the back barrier estuary. We leave the task of capturing heterogeneous water views to future studies.

  6. Robust Lagrange Multiplier tests shows the spatial lag model as preferred to the spatial error model in the Total and Mean Visibility Models. While the spatial error model is preferred for the Mean Visibility Model, comparisons using AIC reveal little benefit to the spatial lag. We utilize the spatial lag model for consistency. Spatial error dependence (Total Visibility Model: χ2 = 1.097; p-value = 0.295; Max Visibility: χ2 = 1.445; p-value = 0.229; Mean Visibility: χ2 = 5.028; p-value = 0.02494) vs spatial dependence (Total Visibility Model: χ2 = 5.171; p-value = 0.023; Max Visibility: χ2 = 4.939; p-value = 0.026; Mean Visibility: χ2 = 3.703; p-value = 0.054).

  7. We conduct the Breusch-Pagan test for heteroskedasticity for the Total Visibility (χ2 = 80.181; p-value = 6.272e-07), Maximum Visibility (χ2 = 73.490; p-value = 5.970e-06), and Mean Visibility (χ2 = 79.050; p-value 9.240e-07.

  8. Table 3 represents a condensed table summarizing seven content distance estimation procedures. Complete results are available upon request.

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Authors and Affiliations

  1. Environmental Studies, Eckerd College, St. Petersburg, FL, 33711, USA

    Paul Hindsley

  2. College of William and Mary, Center for Geospatial Analysis, Swem Library, Williamsburg, VA, 23187, USA

    Stuart E. Hamilton

  3. Department of Economics, Appalachian State University, 3094 Raley Hall, Boone, NC, 28608, USA

    O. Ashton Morgan

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  1. Paul Hindsley
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  2. Stuart E. Hamilton
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  3. O. Ashton Morgan
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Correspondence to Paul Hindsley.

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Hindsley, P., Hamilton, S.E. & Morgan, O.A. Gulf Views: Toward a Better Understanding of Viewshed Scope in Hedonic Property Models. J Real Estate Finan Econ 47, 489–505 (2013). https://doi.org/10.1007/s11146-012-9365-0

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