Using a Geographical Information System (GIS) to implement the Hedonic pricing.
Hedonic pricing (HP) is an economic technique for placing monetary values upon costs or
benefits which do not have market prices. This thesis applies the HP method to the valuation
of road transport and visual disamenity impacts, as reflected in variations within property
prices. In order to carry out such a study one has to determine not only the magnitude of the
environmental impact at each property, but also structural, neighbourhood and accessibility
variables characterising each property. These have to be controlled for before the portion of
the property price attributable to the environmental variable can be observed.
In the past all these variables have been calculated using labour intensive techniques such as
house to house surveys. These led to high study costs and limited the scope of such research.
This thesis circumvents these problems through the use of large scale digital data and a
Geographical Information System (GIS).
This study demonstrates how a GIS can significantly improve a HP study through the
calculation of a wider range of more sophisticated variables. However the calculation of such
a large number of variables causes difficulties when these data are modelled. This study
illustrates how these problems can be overcome through a combination of Principal
Components Analysis and a Multiple Regression. The final model had a higher degree of
explanation and a lower incidence of collinearity than in previous research vindicating the use
of GIS. Prices and values for a range of road transport and visual disamenity impacts are
The main limitations upon the research was the time and effort required to obtain data and to
convert them into a GIS format. This took half of the research time. Various developments
that might improve this situation in the future are presented, along with ways in which the
study could be extended.