Kj. Boyle et Lo. Taylor, Does the measurement of property and structural characteristics affect estimated implicit prices for environmental amenities in a hedonic model?, J REAL ES F, 22(2-3), 2001, pp. 303-318
Hedonic models are commonly used to estimate marginal willingness to pay fo
r environmental amenities. These studies utilize variables that are assumed
to be measured without error (such as the square footage of the lot or the
number of bedrooms) and proxy variables (such as neighborhood or school qu
ality). Lot and structural characteristics may in fact be measured with err
or. Potential sources of error include inaccurate measures and inconsistent
updating. We investigate the effect of using tax-assessor data versus surv
ey data from purchasers to estimate the implicit price of an environmental
amenity, lake-water clarity. Convergent validity of the implicit price for
water clarity is established if the town and survey data provide statistica
lly indistinguishable estimates of implicit prices for this amenity. Overal
l, the town-office and survey data on property characteristics were not sta
tistically different in three of the four market groupings examined, which
suggests that the traditional municipal sources of these data may not conta
in substantial measurement error. Furthermore, convergent validity is satis
fied in all four market areas. However, differences in computed implicit pr
ices of clarity in two of the market areas are large enough that policy dec
isions for environmental quality could be affected by the source of the lot
and structural data.