Specifying the Price Impacts of Utility Easements

Abstract

This paper proposes a nonlinear econometric specification for estimating the hedonic land value impact of dis-amenities that affect only a portion of a property’s value. This specification allows for the possibility that the price-acreage relationship is nonlinear, and assumes that the dis-amenity’s price impact is some product of overall land value. It is based on an assumed data-generating process in which sellers and buyers adjust their asking and bid prices by adjusting what they perceive to be the net property acreage – i.e., the effective usable acreage, after accounting for any use loss associated with the dis-amenity.