Abstract
This study provides estimates of the value of the view amenity in single-family residential real estate markets. A focus on Bellingham, Washington, a city with a variety of views, including ocean, lake, and mountain, allows for differentiation of the view amenity by both type and quality. Results from a hedonic model estimated for several recent years suggest that depending on the particular view, willingness to pay for this amenity is quite high. The highest-quality ocean views are found to increase the market price of an otherwise comparable home by almost 60%; the lowest-quality ocean views are found to add about 8%. For ocean views of all quality levels, the value of a view is found to vary inversely with distance from the water.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Benson, E. D., J. L. Hansen, A. L. Schwartz, Jr., and G. T. Smersh. (1997). “The Influence of Canadian Investment on U.S. Residential Property Values,” Journal of Real Estate Research, forthcoming.
Berndt, E. K., B. H. Hall, R. E. Hall, and J. A. Hausman. (1974). “Estimation and Inference in Nonlinear Structural Models,” Annals of Economic and Social Measurement 3, 653–665.
Brown, Jr., G. M., and H. O. Pollakowski. (1977). “Economic Value of Shoreline,” Review of Economics and Statistics 59 (August), 272–278.
Cassal, E., and R. Mendelsohn. (1985). “The Choice of Functional Forms for Hedonic Price Equations: Comment,” Journal of Urban Economics 18 (September), 135–142.
Clapp, J. M., and C. Giaccotto. (1992). “Estimating Price Trends for Residential Property: A Comparison of Repeat Sales and Assessed Value Methods,” Journal of Real Estate Finance and Economics 5 (December), 357–374.
Correll, M. R., J. H. Lillydahl, and L. D. Singell. (1978). “The Effects of Greenbelts on Residential Property Values: Some Findings on the Political Economy of Open Space,” Land Economics 54 (May), 207–217.
Darling, A. H. (1973). “Measuring Benefits Generated by Urban Water Parks,” Land Economics 49 (February), 22–34.
Davies, G. (1974). “An Econometric Analysis of Residential Amenity,” Urban Studies 11 (February), 217–225.
Do, A. Q., and C. F. Sirmans. (1994). “Residential Property Tax Capitalization: Discount Rate Evidence from California,” National Tax Journal 47 (June), 341–348.
Gatzlaff, D. H., and D. C. Ling. (1994). “Measuring Changes in Local House Prices: An Empirical Investigation of Alternative Methodologies,” Journal of Urban Economics 35 (March), 221–244.
Gillard, Q. (1981). “The Effect of Environmental Amenities on House Values: The Example of a View Lot,” Professional Geographer 33 (May), 216–220.
Halvorsen, R., and R. Palmquist. (1980). “The Interpretation of Dummy Variables in Semilogarithmic Equations,” American Economic Review 70 (June), 474–475.
Johnston, J. (1984). Econometric Methods. New York: McGraw-Hill.
Knight, J. R., J. Dombrow, and C. F. Sirmans. (1995). “A Varying Parameters Approach to Constructing House Price Indexes,” Real Estate Economics 23 (Summer), 187–205.
Morton, T. G. (1977). “Factor Analysis, Multicollinearity, and Regression Appraisal Models,” Appraisal Journal 45 (October), 578–588.
Palmquist, R. B. (1982). “Measuring Environmental Effects on Property Values Without Hedonic Regressions,” Journal of Urban Economics 11 (May), 333–347.
Plattner, R. H., and T. J. Campbell. (1978). “A Study of the Effect of Water View on Site Value,” Appraisal Journal 46 (January), 20–25.
Rodriguez, M., and C. F. Sirmans. (1994). “Quantifying the Value of a View in Single-Family Housing Markets,” Appraisal Journal 62 (October), 600–603.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Benson, E.D., Hansen, J.L., Schwartz, A.L. et al. Pricing Residential Amenities: The Value of a View. The Journal of Real Estate Finance and Economics 16, 55–73 (1998). https://doi.org/10.1023/A:1007785315925
Issue Date:
DOI: https://doi.org/10.1023/A:1007785315925