A lake’s impact on suburban dwellings : a hedonic price study on housing in Täby

Abstract: Ecosystem services are of great interest for both cultural experiences, health benefits and keeping the earth living. With a growing population and increasing exploitation, it is crucial to recognize the value of natural sceneries to real estate in Sweden. This study aims to measure the willingness to pay for the distance from a house to the lake and that to the nearest forest area in the suburban municipality of Täby, Sweden. The Hedonic price method is used, which is a widely used model for valuation of non-market goods. The residential house sales prices for houses sold in 2014-2017, house characteristics, regional income, the distance to the lake Rönningesjön,the distance to the forest area - nature reserve Skavlöten, and other relevant information are obtained from website Booli, Hemnet, and Google maps. The results indicate that people would like to pay higher price for a closer distance to environmental attributes, in particular the distance to a lake. Robust estimation results show that the closer the distance between the house and the lake Rönningesjön the higher price of the house, and the cross-term for house type and lake distance also implies an additional price increase for detached houses. But the effect of the distance between the house and nature reserve Skavlöten is not robust. The results confirm that the residents value the local nature and would suggest further research on the valuation on cultural ecosystem services in urban environments.