How cultural values are reflected on the housing market : direct effects and the cultural spillover

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How cultural values are reflected on the housing market : direct effects and the cultural spillover

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Publication Article, peer reviewed scientific
Title How cultural values are reflected on the housing market : direct effects and the cultural spillover
Author Andersson, Magnus ; Kopsch, Fredrik ; Palm, Peter
Date 2019
English abstract
Purpose: The purpose of this paper is to analyse two questions. First, is there, and if so, how large is the price premium paid for a building exhibiting a cultural value? Second, are there any spillover effects of buildings with cultural values on sales prices of neighbouring houses? Design/methodology/approach: Using a unique database of all buildings in the region of Halland, Sweden, combined with transaction data, hedonic models can be estimated, with spatially lagged variables describing proximity to three classes of culturally classified building – A, B and C – corresponding to building of national interest, building of regional interest and building of local interest. In addition, the authors also estimate models with a spatial specification on the error term, in an attempt to control for omitted variables. Findings: The results indicate that cultural classification plays a role in determining the price of a property, with large effects (ranging between 36 and 60% price premiums) for the highest classification. In addition, the authors find evidence of a cultural externality, houses in the vicinity of building with high cultural value sell at a small, but statistically significant premium of 1%. Originality/value: The cultural externality may be overlooked when it comes to valuation of cultural values in society, and therefore, it is likely that warranted protection acts to preserve cultural values in buildings become less than the social optimum. This paper suggests a new measure to cultural values contrasting previous research that rely on cultural preservation. This approach should limit problems with measurement errors that may lead to biased results.
DOI https://doi.org/10.1108/IJHMA-02-2018-0016 (link to publisher's fulltext.)
Publisher Emerald
Host/Issue International Journal of Housing Markets and Analysis;3
Volume 12
ISSN 1753-8270
Language eng (iso)
Subject Cultural values
Valuation
Cultural spillover
Hedonic modeling
Kulturmiljö Halland
Humanities/Social Sciences
Research Subject Categories::INTERDISCIPLINARY RESEARCH AREAS
Handle http://hdl.handle.net/2043/27950 Permalink to this page
Link to publication in DiVA Find this research publication in DiVA.
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