Consumption preferences and environmental externalities: A hedonic analysis of the housing market in Guangzhou

Chi Yung JIM, Wendy Y. CHEN

Research output: Contribution to journalArticlespeer-review

84 Citations (Scopus)

Abstract

The urban housing market of China has been transformed since the 1980s from a centrally-planned to a free-market system. This study aimed to (1) investigate the position of outdoor environmental quality in house-buyers' preferences; (2) assess monetary values attributed to environmental externalities by the hedonic pricing method (HPM); and (3) test the applicability of HPM in China. The study area was Guangzhou, the major city of south China with a booming real-estate market. A questionnaire survey was conducted with households in new residences sold in 2004. The main buying motives were improving living quarters and floor area. Security concerns and a preference for high-rise buildings were somewhat unexpected. Good outdoor environment, including green space provision, proximity to parks, and views of green space and water, carried significant hedonic values. Differences between the submarkets of old and new towns were found; new town households expected apartments in high-rise blocks, exclusive residential land use, and views of green space, while old town households preferred proximity to shopping areas and workplaces, green space within the development and proximity to nearby parks. The findings could help to fine tune the developing housing market to match supply with demand in quality terms. Values accorded to environmental attributes could justify funding for urban green spaces and nature conservation. The study verified the applicability of HPM to the housing context in China. Copyright © 2006 Elsevier Ltd. All rights reserved.

Original languageEnglish
Pages (from-to)414-431
JournalGeoforum
Volume38
Issue number2
DOIs
Publication statusPublished - Mar 2007

Citation

Jim, C. Y., & Chen, W. Y. (2007). Consumption preferences and environmental externalities: A hedonic analysis of the housing market in Guangzhou. Geoforum, 38(2), 414-431. doi: 10.1016/j.geoforum.2006.10.002

Keywords

  • Compact city
  • Consumption preference
  • Hedonic pricing method
  • Environmental externalities
  • Green space
  • Housing market
  • Housing value
  • Sustainable urban development
  • Guangzhou
  • China

Fingerprint Dive into the research topics of 'Consumption preferences and environmental externalities: A hedonic analysis of the housing market in Guangzhou'. Together they form a unique fingerprint.