Abstract

Studies related to the valuation of urban environmental amenities like water bodies, green spaces and clean air are very scarce in developing countries. The present study is a first of its kind in India where Hedonic Pricing Method (HPM) has been used to study the impact of key environmental attributes like proximity of an urban lake having good water quality, parks/gardens, clean air and traffic noise attenuation on the market rates of residential plots in a planned city. Two functional hedonic pricing models, double log with weighted least square and ordinary least square, were constructed. Both the models offered comparable and reliable results. Proximity to Sukhna lake of Chandigah city and Leisure valley chain of green spaces raised housing prices by about 10 % and 2 % respectively. Air quality showed significant improvement near green spaces. The study demonstrates that there is significant scope of enhancing government controlled collector rate of urban residential property in areas near to Sukhna lake. The revenue so realized could be ploughed back in conservation efforts of the lake and expanding the green spaces in the city. Values accorded to urban environmental amenities in the study can justify the public spending and seek more funding for the betterment of urban water bodies and green spaces in developing countries.