Effects of Air Pollution on House Value (Case study: Metropolitan Tabriz)

This paper employs the hedonic property value analysis to extract the value of clean air for families in metropolitan Tabriz. The results obtained from combining data on house values and their characteristics (taken from the Tabriz Family Life Survey) and data on the average level of pollutants in this city indicate that air pollution has a negative effect on housing value. In other word, individuals show a preference toward environmental amenities when they choose their houses. Furthermore, a segmentation of the housing market shows that the average marginal willingness to pay (MWTP) for improving air quality in upper-income households occupying spacious housing-units exceeds that of lower-income households occupying units with less preferable characteristics. In addition, the level of household's education affects on their MWTP.