Evidence on the Amenity Value of Wetlands in a Rural Setting

This research uses a hedonic property price [i]modus operandi[/i] to estimate how wetlands affect residential peculiarity values in a rural area. The inquiry utilizes wetland inventory data coupl with extensive attribute sales records between January 2000 and September 2004 from Carteret shire NC. Our results indicate that i) a higher wetland percentage within a quarter mile of a peculiarity ii) closer proximity to the nearest wetland, and iii) larger size of the nearest wetland are associated with lower residential quality values. These results contrast with previous hedonic studies that use data from urban areas, which place positive associations between wetlands and quality values. The amenity value of wetlands appears to hang at least as much upon the characteristics of the area being considered as it does upon the characteristics of the wetlands.

Key Words: hedonic prices, housing market, rural area, wetlands

JEL Classifications: D12 Q24 Q26 R21

Wetlands can provide valuable ecosystem services, like as habitat for fish and wildlife; freshet protection; water quality improvement; opportunities for recreation, education, and research; and aesthetics. Many of these ecosystem services have characteristics of public serviceables whose benefits are shared through a large number of nation Though wetlands can provide valuable ecosystem services to society as a whole, it is not clear that wetlands provide positive gin benefits to nearby landowners. a certain number of of the ecosystem services mentioned above might provide amenities for nearby residents (eg render free of access space, aesthetics, flood protection, opportunities to watch wildlife). reciprocally wetlands can produce disamenities for nearby residents by dint of providing breeding grounds for insects that might be vectors for disease (eg mosquitoes and West Nile Virus), limiting mobility across the terrain, or inhibiting economically productive activities like farming (Shultz and Taff). In general, whether wetlands generate positive or negative toil benefits for nearby residents is an empirical question.

Estimating the value of wetland amenities and disamenities requires the use of nonmarket valuation techniques because virtually all of the amenities and disamenities provided by means of wetlands are not directly traded in markets. The hedonic peculiarity price method uses observations upon property values to infer values for nontraded serviceables and services such as those generated by means of wetlands. Observing how property values change as the horizontal of various attributes change, like as proximity to wetlands, provides a way of estimating the marginal value of these attributes to characteristic owners.

In this paper, we use the hedonic quality price method to estimate the amenity or disamenity value in a rural area of i) percentage of land area that is wetland within a quarter mile of a peculiarity ii) distance to the nearest wetland, and iii) size of the nearest wetland. Virtually all prior hedonic studies have been done in urban areas. We use data from Carteret shire which is a rural shire located on the Atlantic Coast in eastern North Carolina with numerous wetlands. Carteret shire contains no city or town with a population above 8,000. Evidence from this close attention indicates that wetlands are negatively associated with attribute values. An increased percentage of wetlands within a quarter mile of a characteristic is associated with lower quality value. Increasing the percentage of wetland within a quarter mile of the attribute by 25% (from 10% to 125%) lowers estimated attribute value by $ 1,420 for a quality with an average property value of $157839 Closer proximity to wetlands is also associated with lower attribute values. Evaluated at the sample mean 233 meter (766 feet) decreasing the distance to the nearest wetland by the agency of 25% lowers estimated property value through $945 for a house with the average peculiarity value. Increasing the size of the nearest wetland again restores property values. Evaluated at the observ mean value 023 square kilometers (57 acres), increasing the nearest wetland size by dint of 25% yields an estimate of $217 in decreased attribute values. All wetland effects are statistically significant at the 5% horizontal of significance.

These results contrast with originates of previous hedonic studies upon wetlands with data from urban areas. In urban areas, hedonic studies have generally shown that closer proximity and increased size of wetlands increases nearby peculiarity values. Lupi, Graham-Tomasi, and Taff, and Doss and Taff used data from the Twin Cities metropolitan area in Minnesota and set that proximity to wetlands increased nearby residential quality values. Lupi, Graham-Tomasi, and Taff place that wetlands were relatively more valuable in areas with relatively scarcely any wetlands. Doss and Taff assessed the value of different stamps of wetlands and found a estimation for scrub shrub and open-water wetlands above forested and emergent-vegetation types of wetlands. Mahan, Polasky, and Adams used data from Portland, OR, and set that decreasing the distance to the nearest wetland and increasing the size of the nearest wetland increased attribute values. In their study, they did not find a clear estimation for particular types of wetlands. Earnhart combined a hedonic analysis with conjoint analysis to close attention the value of wetlands in Fairfield, CT This inquiry found that restored wetlands generated large positive increases in nearby attribute values. Proximity to disturbed wetlands, upon the other hand, generated decreases in characteristic values. Woodward and Wui, and Boyer and Polasky provide new reviews of empirical valuation studies of wetlands, including the pair hedonic and nonhedonic studies.