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The spatial effect of estuaries pollution on the housing rental market: evidence from South America

Published online by Cambridge University Press:  10 June 2020

Manuel A. Zambrano-Monserrate Open the ORCID record for Manuel A. Zambrano-Monserrate [Opens in a new window]  and
Maria Alejandra Ruano
Manuel A. Zambrano-Monserrate*
Affiliation:
Universidad Espíritu Santo, Ecuador
Maria Alejandra Ruano
Affiliation:
Escuela Superior Politécnica del Litoral, ESPOL, Facultad de Ciencias Sociales y Humanísticas, Campus Gustavo Galindo Km 30.5 Vía Perimetral, P.O. Box 09-01-5863, Guayaquil, Ecuador
*
*Corresponding author. E-mail: [email protected]
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Abstract

Estuaries are water bodies, many of which contribute to the sustainable development of cities. Many of them are considered natural landscapes, offering various recreational services to the population. However, estuary degradation is a common problem in developing countries. Ecuador, for example, has a significant problem with the pollution of its estuaries. Machala is one of the most affected cities due to the contamination of these water bodies. This issue has generated negative externalities in the housing market. Thus, our central hypothesis is that rental prices of houses are revalued as their distance from polluted estuaries increases. Using the hedonic pricing approach, our results confirm that the price of a residence increases by US$9.45 for every 100 m farther it is from the closest estuary. This amount constitutes approximately 5.25 per cent of the average rental value in Machala.

Keywords

economicsestuarieshedonic pricesnegative environmental externalitiesspatial regression models

JEL classification

Q56: Environment and Development • Environment and Trade • Sustainability • Environmental Accounts and Accounting • Environmental Equity • Population Growth O18: Urban, Rural, Regional, and Transportation Analysis • Housing • Infrastructure Q53: Air Pollution • Water Pollution • Noise • Hazardous Waste • Solid Waste • Recycling
Type
Research Article
Information
Environment and Development Economics , Volume 26 , Issue 1 , February 2021 , pp. 69 - 87
Copyright
Copyright © The Author(s) 2020. Published by Cambridge University Press

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