The Effect of Urban River-valley Ecosystem Services on Real Estate Prices: The Case Study of Farahzad River-valley Area of Tehran

Document Type : Original Article

Authors

1 Assistant Professor of Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran

2 MA in Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran

10.29252/jem.2023.230250.1815

Abstract

Housing price fluctuations are a very important issue in the housing economy and are affected by different factors. One of these factors is the impact of environmental variables. Therefore, in deciding to buy a house, there is a hidden market due to considering the quality of the environment around the property. The purpose of this study is to investigate the effect of environmental services of the Farahzad river ecosystem on housing prices and to evaluate the social-economical revitalization of this river. For this purpose, 386 questionnaires and the hedonic method were used in the form of estimating three regression models to achieve the goal. The results show that the average willingness to pay for the restoration is equal to 611,000 rials per month. The results of all three regressions indicate the importance of environmental variables on housing prices, so that in the first model, 22.6%, in the second model, 17.1%, and in the last model, they cover 16.5% of the price changes. Also, the results show that the revitalization of this river is not justified from the point of view of economic evaluation at the regional level, considering its costs, but it is justified at the level of Tehran city, considering the benefits and the generalization of willingness to pay. The information of this study can be useful for the revitalization of urban gorges.

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References

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