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Hedonic pricing is the study of multi-correlation between environmental characteristics of a good and its sales price. The Hedonic property pricing (HPP) method can be used to estimate monetary values for ecosystem services that directly affect amenities of properties which in turn are reflected in property prices. The HPP method requires large data sets of property sales statistics with physical characteristics of the property itself - and particularly for ecosystem services - e.g. characteristics of green infrastructure in the neighborhood.
Requirements:
- Need to collect lots of new data on property prices and characteristics
- Medium-term (1-2 years)
- Medium-demanding (6-12 PMs)
Advantages:
- Recognised and established approach
- Potentially compatible with national accounting standards
- Provides both public and private economic rationales for providing ecosystem services /amenities from green infrastructure
Constraints:
- Requires large panel data sets of property sales data
- Requires extensive GIS pre-processing of neighbourhood characteristics
- Results are sensitive to modeling assumptions regarding spatial auto-collinearity
Licence:
- Free, no licence
Development stage:
- Full, working product
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