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The Impact of Housing Market Segmentation between Tourists and Residents on the Hedonic Price for Landscape Quality

Summary

Market segmentation is an important issue when estimating the implicit price for an environmental amenity from a surrogate market like property. This paper tests the hypothesis of a segmentation of the housing market between tourists and residents and computes the implicit price for natural landscape quality in Swiss alpine resorts. The results show a clear segmentation between both groups of consumers, although tests also show that the estimated coefficient for landscape is similar in the tourists’ model and in the residents’. However, since the functional form is non linear, the nominal — rather than relative — value of a change in natural landscape quality is higher in the tourist housing market than in the residents’. Hence, considering the segmentation of the market between tourists and residents is essential in order to provide valid estimates of the nominal implicit price of natural landscape quality.

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Correspondence to Nils Soguel.

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The research benefited from the support of the Swiss National Research Foundation allocated as part of the National Research Program 48 “Landscapes and habitats of the Alps”. Helpful comments by Anil Markandya, Tim Taylor and the editors of this special issue are gratefully acknowledged.

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Open Access This article is distributed under the terms of the Creative Commons Attribution 2.0 International License ( https://creativecommons.org/licenses/by/2.0 ), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Soguel, N., Martin, MJ. & Tangerini, A. The Impact of Housing Market Segmentation between Tourists and Residents on the Hedonic Price for Landscape Quality. Swiss J Economics Statistics 144, 655–678 (2008). https://doi.org/10.1007/BF03399270

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  • DOI: https://doi.org/10.1007/BF03399270

JEL-Classification

  • D49
  • Q26
  • Q51

Keywords

  • Hedonic prices method
  • Market segmentation
  • Landscape quality
  • Landscape value
  • MACBETH