Air Pollution and Housing Values in Korea: A Hedonic Analysis with Long-range Transboundary Pollution as an Instrument
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10640_2022_682_ReferencePDF.pdf
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2.77 MB
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Author(s)
Nam, Kyung-Min
Ou, Yifu
Kim, Euijune
Zheng, Siqi
Date Issued
April 26, 2022
Publisher
Springer Netherlands
Citation
Nam, Kyung-Min, Ou, Yifu, Kim, Euijune and Zheng, Siqi. 2022. "Air Pollution and Housing Values in Korea: A Hedonic Analysis with Long-range Transboundary Pollution as an Instrument."
Version
Author's final manuscript
Abstract
Abstract
We estimate the degree and scope of PM2.5-induced negative price shock in Korea’s local housing markets, taking a two-stage hedonic approach. For the analysis, Korea’s local PM2.5 levels are treated as endogenous and are instrumented with regional air pollutants from China. We find that a unit µg/m3 PM2.5 level increase in a Korean city is associated with a 3.7% decline in local residential property value. Long-range transboundary pollution has significant effects on Korea’s local PM2.5 levels with an elasticity of 0.05. These results enrich the sparse hedonic literature on local air-quality valuation in connection to long-range transboundary pollution in East Asia. The advanced methodological features presented in our two-staged identification strategy with a novel instrument is another contribution of this paper.
MIT Department
Massachusetts Institute of Technology. Department of Urban Studies and Planning
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Attribution-NonCommercial-ShareAlike 4.0 International
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DOI of Published Version
https://doi.org/10.1007/s10640-022-00682-1
