High-quality water resources provide a wide range of benefits, but the value of water quality is often not fully represented in environmental policy decisions, due in large part to an absence of water quality valuation estimates at large, policy relevant scales. Using data on property values with nationwide coverage across the contiguous United States, we estimate the benefits of lake water quality as measured through capitalization in housing markets. We find compelling evidence that homeowners place a premium on improved water quality. This premium is largest for lakefront property and decays with distance from the waterbody. In aggregate, we estimate that 10% improvement of water quality for the contiguous United States has a value of $6 to 9 billion to property owners. This study provides credible evidence for policymakers to incorporate lake water quality value estimates in environmental decision-making.
|Original language||English (US)|
|Journal||Proceedings of the National Academy of Sciences of the United States of America|
|State||Published - Apr 11 2023|
Bibliographical noteFunding Information:
http://www.msi.umn.edu.We thank Zillow,Inc.for having made Zillow Transaction and Assessment Dataset (ZTRAX) available free of charge for US academic, nonprofit, and governmental researchers. More information on accessing the data can be found at http://www.zillow.com/ztrax. Christoph Nolte acknowledges support from the Department of Earth & Environment at Boston University, the Junior Faculty Fellows program of Boston University's Hariri Institute for Computing and Computational Science, and The Nature Conservancy. Parts of an earlier version of this paper written by this author team were used as part of coauthor Jiarui Zhang’s dissertation. The results and interpretations are those of the authors and do not reflect the position or policies of Zillow Group, U.S. Environmental Protection Agency, and the participating universities.
Copyright © 2023 the Author(s).
- Hedonic pricing model
- Lake water quality
- National study
- Property values
- Value of water
PubMed: MeSH publication types
- Journal Article