Abstract:
Wetlands play an important role in our social and economic well being. Many
services wetlands provide, such as wildlife habitat, recreation, and aesthetics, are
collective goods. Because these services are not represented in a market, an over supply
of wetlands converted to other uses and an under supply of protected wetlands may result.
In order to improve wetland resource allocation decisions, nonmarket valuation
techniques can be used to estimate the economic value of wetland attributes that represent
collective goods.
Using the hedonic property pricing approach, this study estimates the value of
wetland environmental amenities in the Portland, Oregon metropolitan area. Detailed
residential housing and wetland data are used to relate the sales price of a residential
property to the structural characteristics of the property, neighborhood attributes in which
the property is located, and amenity values of wetlands and other environmental
characteristics. The measures of primary interest are distance to four different wetland
types (open water, emergent vegetation, scrub shrub, and forested). Other environmental
variables evaluated include size of nearest wetland and proximity to parks, lakes, streams,
and rivers.
The results of the hedonic price function analysis indicate that wetlands influence
the value of residential property and that the degree of influence varies by wetland type.
The results also show that wetlands influence property values differently than other
amenity generating features such as parks, lakes, rivers, and streams. The results
concerning the influence on price of proximity to specific wetland types were mixed. For
some wetlands, proximity had a positive effect on sales price, while for others, proximity
had either a negative relationship or no effect. The estimated marginal implicit prices on
wetland proximity were sensitive to the function form used.
In addition to estimating the hedonic price functions, second-stage regression
analysis was used to estimate the willingness-to-pay function for wetland size. Example
welfare effects are computed using the estimated willingness-to-pay function. The
estimated willingness-to-pay function appears reasonable based on the expectation that
residents have a small, but significant, positive willingness to pay larger wetlands.
