Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-26T16:31:45.542Z Has data issue: false hasContentIssue false
  • English
  • Français

Valuing Rural Recreation Amenities: Hedonic Prices for Vacation Rental Houses at Deep Creek Lake, Maryland

Published online by Cambridge University Press:  15 September 2016

Jon P. Nelson
Jon P. Nelson*
Affiliation:
The Pennsylvania State University, University Park, Pennsylvania
Get access Rights & Permissions [Opens in a new window]

Abstract

Hedonic prices are estimated for summer and winter rentals for vacation houses located near a lake and ski-golf resort in rural western Maryland. Regressions for weekly rents are conditioned on house size, quality, and recreation features including lakefront proximity and ski-slope access. Percentage effects and marginal implicit prices indicate that access to recreation is reflected importantly in rental offers. Evaluated at the means, lakefront locations command a premium of $1,100–1,200 per week, and the premium for ski-slope access is $500–600 per week. Unit recreation values are about $18 per person per day for a lakefront location with a private dock and $7 per person per day for a ski-slope location. There are small differences in the unit values for three real estate management agencies. Although there is evidence of spatial correlation in ordinary least squares residuals, estimation of spatial-lag and spatial-error models does not yield substantial changes in the empirical results.

Keywords

recreation demandenvironmental valuationhedonic pricesspatial models
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 39 , Issue 3 , October 2010 , pp. 485 - 504
Copyright
Copyright © 2010 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anselin, L. 2003. “Spatial Externalities, Spatial Multipliers, and Spatial Econometrics.” International Regional Science Review 26(2): 153–166.CrossRefGoogle Scholar
Bell, J. 2007. “History of the Wisp Resort.” Available at http://deepcreekhotproperties.blogspot.com/2007/08/history-of-wisp-resort.html (accessed November 16, 2009).Google Scholar
Bell, J. 2008. “About Deep Creek Lake.” Available at http://deepcreekhotproperties.blogspot.com/2008/05/about-deepcreek-lake-jon-bell-railey.html (accessed November 16, 2009).Google Scholar
Benjamin, J.D., Jud, G.D., and Winkler, D.T. 2001. “The Value of Smoking Prohibitions in Vacation Rental Properties.” Journal of Real Estate Finance and Economics 22(1): 117–128.CrossRefGoogle Scholar
Bockstael, N.E., McConnell, K.E., and Strand, I.E. 1991. “Recreation.” In Braden, J.B. and Kolstad, C.D., eds., Measuring the Demand for Environmental Quality. Amsterdam: NorthHolland.Google Scholar
Bond, M.T., Seiler, V.L., and Seiler, M.J. 2002. “Residential Real Estate Prices: A Room with a View.” Journal of Real Estate Research 23(1/2): 129–137.CrossRefGoogle Scholar
Bowen, W.M., Mikelbank, B.A., and Prestegaard, D.M. 2001. “Theoretical and Empirical Considerations Regarding Space in Hedonic Housing Price Model Applications.” Growth and Change 32(4): 466–490.CrossRefGoogle Scholar
Butsic, V., Hanak, E., and Valletta, R.G. 2008. “Climate Change and Housing Prices: Hedonic Estimates for North American Ski Resorts.” Working Paper No. 2008-12, Federal Reserve Bank of San Francisco, San Francisco, CA.CrossRefGoogle Scholar
Can, A. 1990. “The Measurement of Neighborhood Dynamics in Urban House Prices.” Economic Geography 66(3): 254–272.CrossRefGoogle Scholar
Day, B.H. 2001. The Theory of Hedonic Markets: Obtaining Welfare Measures of Changes in Environmental Quality Using Hedonic Market Data. Economics for the Environment Consultancy, London, UK.Google Scholar
Deep Creek Times. 2009. Map of Deep Creek Lake. Available at http://www.deepcreektimes.com/images/dclmapl.jpg (accessed November 16, 2009).Google Scholar
Deller, S., and Lledo, V. 2007. “Amenities and Rural Appalachia Economic Growth.” Agricultural and Resource Economics Review 36(1): 107–132.CrossRefGoogle Scholar
Deller, S.C., Tsai, T.-H., Marcouiller, D.W., and English, D.B.K. 2001. “The Role of Amenities and Quality of Life in Rural Economic Growth.” American Journal of Agricultural Economics 83(2): 352–365.CrossRefGoogle Scholar
Dissart, J.C., and Marcouiller, D.W. 2005. “Impact of Outdoor Recreation Facilities on Remote Rural Income Growth.” In Green, G.P., Deller, S.C., and Marcouiller, D.W., eds., Amenities and Rural Development: Theory, Methods and Public Policy. Cheltenham, UK: Edward Elgar.Google Scholar
Dubin, R.A. 1988. “Estimation of Regression Coefficients in the Presence of Spatially Autocorrelated Error Terms.” Review of Economics and Statistics 70(3): 168–173.CrossRefGoogle Scholar
Dubin, R.A. 1998. “Spatial Autocorrelation: A Primer.” Journal of Housing Economics 7(4): 304–327.CrossRefGoogle Scholar
Freeman, A.M. 2003. The Measurement of Environmental and Resource Values: Theory and Methods (2nd ed.). Washington, D.C.: Resources for the Future. Google Scholar
Geoghegan, J., Wainger, L.A., and Bockstael, N.E. 1997. “Spatial Landscape Indices in a Hedonic Framework: An Ecological Economics Analysis using GIS.” Ecological Economics 23(3): 251–264.CrossRefGoogle Scholar
Gibbs, J.P., Halstead, J.M., Boyle, K.J., and Huang, J.-C. 2002. “An Hedonic Analysis of the Effects of Lake Water Clarity on New Hampshire Lakefront Properties.” Agricultural and Resource Economics Review 31(1): 39–46.CrossRefGoogle Scholar
Hanley, N., and Barbier, E.B. 2009. Pricing Nature: Cost-Benefit Analysis and Environmental Policy. Cheltenham, UK: Edward Elgar.Google Scholar
Hite, D. 1998. “Information and Bargaining in Markets for Environmental Quality.” Land Economics 74(3): 303–316.CrossRefGoogle Scholar
Johnson, K.M., and Beale, C.L. 2002. “Nonmetro Recreation Counties: Their Identification and Rapid Growth.” Rural America 17(4): 12–19.Google Scholar
Johnston, R.J., Opaluch, J.J., Grigalunas, T.A., and Mazzotta, M.J. 2001. “Estimating Amenity Benefits of Coastal Farmland.” Growth and Change 32(2): 305–325.CrossRefGoogle Scholar
Kennedy, P.E. 1981. “Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations.” American Economic Review 71(4): 801–802.Google Scholar
Kennedy, P.E. 2003. A Guide to Econometrics (5th ed.). Cambridge, MA: MIT Press. Google Scholar
Kim, C.W., Phipps, T.T., and Anselin, L. 2003. “Measuring the Benefits of Air Quality Improvement: A Spatial Hedonic Approach.” Journal of Environmental Economics and Management 45(1): 24–39.CrossRefGoogle Scholar
Knight, J.R. 2008. “Hedonic Modeling of the Home Selling Process.” In Baranzini, A., Ramirez, J., Schaerer, C., and Thalmann, P., eds., Hedonic Methods in Housing Markets: Pricing Environmental Amenities and Segregation. New York: Springer.Google Scholar
LeSage, J., and Pace, R.K. 2009. Introduction to Spatial Econometrics. Boca Raton, FL: CRC Press.CrossRefGoogle Scholar
Maryland Department of Natural Resources. 2001. “Deep Creek Lake Recreation and Land Use Plan.” Available at http://www.dnr.state.md.us/publiclands/western/deepcreeklake.html (accessed November 16, 2009).Google Scholar
MDNR [see Maryland Department of Natural Resources].Google Scholar
Mollard, A., Rambonilaza, T., and Vollet, D. 2007. “Environmental Amenities and Territorial Anchorage in the Recreational-Housing Rental Market: A Hedonic Approach with French Data.” Land Use Policy 24(2): 484–493.CrossRefGoogle Scholar
Mueller, J., and Loomis, J.B. 2008. “Spatial Dependence in Hedonic Property Models: Do Different Corrections for Spatial Dependence Result in Economically Significant Differences in Estimated Implicit Prices?” Journal of Agricultural and Resource Economics 33(2): 212–231.Google Scholar
Palmquist, R.B. 1992. “Valuing Localized Externalities.” Journal of Urban Economics 31(1): 59–68.CrossRefGoogle Scholar
Pope, J.C. 2008. “Do Seller Disclosures Affect Property Values? Buyer Information and the Hedonic Model.” Land Economics 84(4): 551–572.CrossRefGoogle Scholar
Reeder, R.J., and Brown, D.M. 2005. “Recreation, Tourism, and Rural Well-Being.” Economic Research Report No. 7, Economic Research Service, U.S. Department of Agriculture, Washington, D.C.Google Scholar
Rush, R., and Bruggink, T.H. 2000. “The Value of Ocean Proximity on Barrier Island Houses.” Appraisal Journal 68(2): 142–150.Google Scholar
Salvi, M. 2008. “Spatial Estimation of the Impact of Airport Noise on Residential Housing Prices.” Swiss Journal of Economics and Statistics 144(4): 577–606.CrossRefGoogle Scholar
Smith, V.K., and Palmquist, R.B. 1994. “Temporal Substitution and the Recreational Value of Coastal Amenities.” Review of Economics and Statistics 76(1): 119–126.CrossRefGoogle Scholar
Soguel, N., Martin, M.-J., and Tangerini, A. 2008. “The Impact of Housing Market Segmentation between Tourists and Residents on the Hedonic Price for Landscape Quality.” Swiss Journal of Economics and Statistics 144(4): 655–678.CrossRefGoogle Scholar
Taylor, L.O., and Smith, V.K. 2000. “Environmental Amenities as a Source of Market Power.” Land Economics 76(4): 550–568.CrossRefGoogle Scholar
Timothy, D.J. 2004. “Recreational Second Homes in the United States: Development Issues and Contemporary Patterns.” In Hall, C.M. and Muller, D.K., eds., Tourism, Mobility and Second Homes: Between Elite Landscape and Common Ground. Clevedon, UK: Channel View.Google Scholar
U.S. Bureau of the Census. 2009. “Total Housing Inventory for the United States.” Statistical Abstract of the United States (Table 940). Washington, D.C.: U.S. Government Printing Office. Available at http://www.census.gov (accessed November 16, 2009).Google Scholar
van Garderen, K.J., and Shah, C. 2002. “Exact Interpretation of Dummy Variables in Semilogarithmic Equations.” Econometrics Journal 5(1): 149–159.CrossRefGoogle Scholar
Wheaton, W.C. 2005. “Resort Real Estate: Does Supply Prevent Appreciation?” Journal of Real Estate Research 27(1): 1–16.CrossRefGoogle Scholar
Wilman, E.A. 1981. “Hedonic Prices and Beach Recreational Values.” In Smith, V.K., ed., Advances in Applied Microeconomics (Vol. 1). Greenwich, CT: JAI Press.Google Scholar
Wilman, E.A. 1984. External Costs of Coastal Beach Pollution: An Hedonic Approach. Washington, D.C.: Resources for the Future.Google Scholar
Zerbe, R.O., and Dively, D.W. 1994. Benefit-Cost Analysis: In Theory and Practice. New York: HarperCollins.Google Scholar