The effect of air pollution on property prices in Malta : a hedonic analysis

Abstract

Many of the environmental goods we are exposed to are not traded in the market, and their price is not known, thereby imposing severe repercussions on private decisions, making the gap between private and social costs of the environment grow even further. In this dissertation, evidence is presented that Nitrogen Dioxide does have an affect on the value of property prices in Malta. Much publicity has been given to the safeguarding of our air quality and environment but how much is effectively being done about it? Air pollution is becoming a core factor in housing prices and Hedonic Models. More often than not the results seem to be uncertain, and most of the studies carried out to assess the impact of the quality of the environment on house prices were done in the United States; however literature shows that the importance given to air pollution differs considerably in Europe. Air pollution, such as that caused by Nitrogen Dioxide, doesn’t only affect house prices, but it also has spillover effects which can lead to respiratory problems and other health problems.